Personalities put to the test in Brazilian and Israeli elections

Hello and welcome to the working week.

Overnight results from Brazil will play a leading role in news coverage as the vote brings months of bitter campaigning to an end. Deforestation in the Amazon will be an especially pertinent topic with COP27 kicking off in Egypt at the close of this week.

With veteran Luiz Inácio Lula da Silva falling two points shy of the 50 per cent required to be elected outright in early October, Sunday’s vote will reflect how entrenched “Bolsonarismo” is in the rural areas at the centre of a booming yet ecologically disastrous commodities trade.

Brazil’s interior has undergone significant clearances by agribusiness for cattle, soy and maize during incumbent Jair Bolsonaro’s first term in office. This has reversed a decline in deforestation rates between 2003 and 2015.

Opposition to state intervention fomented support for Bolsonaro this election campaign, though he nevertheless sought to secure the backing of poorer voters with a 50 per cent increase in social welfare payments.

Stakes are high for indigenous communities who have suffered reprisals at the hands of illegal loggers, while being overlooked by legislators seeking to permit the mining of raw materials in reserves without their consent.

On Tuesday, Benjamin Netanyahu will be eager to mount a coup in Israel’s fifth election in less than four years. Leading a rightwing bloc, he is seeking to overcome a small deficit in polling to take a majority in the Knesset and return as the nation’s prime minister.

In the US, looming midterms mean presidents past and present are being rolled out to campaign in support of candidates. The final 72 hours of the campaign will see president Joe Biden and former presidents Barack Obama and Donald Trump appear in Pennsylvania, while the latter will also hold a rally in Florida to close the weekend.

Companies

Brazilian gas company Petrobras is due to publish its Q3 results on Thursday. The company suffered from multibillion-dollar corruption when the left were last in office in Brazil.

Bolsonaro previously spoke of privatising Petrobras, though Lula’s manifesto called for its return as an “integrated energy company” with his party ambitious for it to play a leading role in the nation’s clean energy transition.

Stocks in the company slid last week after polling indicated Lula would rout Bolsonaro in Sunday’s run-off vote. It was among several who lost out on the release of polling, though it also reported that oil production for the third quarter fell 6.8 per cent compared with the same period last year.

Economic data

On Wednesday, the US Federal Reserve will announce its decision on interest rates. Policymakers fear strong wage growth has maintained high inflation, though officials suggested the central bank should begin to prepare for a slowdown in rate rises.

Data published by the US Bureau of Labor Statistics and the nation’s commerce department on Friday showed pay for civilian workers during the third quarter increased by 1.2 per cent, while personal consumption rose 0.5 per cent.

The Bank of England is expected to raise rates by 75 basis points on Thursday to 3 per cent. Rates have severely hampered homeowners, with spillover into the rental market.

In a survey published on Friday, the UK’s Office for National Statistics found half of British respondents with a mortgage said they were worried about a change in interest rates. Two in three people were also spending less on non-essentials and reducing use of gas and electricity.

Monday’s planned fiscal statement in the UK has been replaced with an autumn statement to be delivered by chancellor Jeremy Hunt on November 17.

Key economic and company reports

Here is a more complete list of what to expect in terms of company reports and economic data this week.

Monday

• UAE, IMF news conference post-publication of outlook report for Middle East and north Africa

• Norway, results of treasury bill auction

• Q3: Banco Comercial Português, ON Semiconductor, Japan Tobacco

Tuesday

• Switzerland, consumer index

• Japan, BoJ monetary policy meeting minutes

• US and Russia, S&P Manufacturing PMI

• Europe, Q3 gross domestic product

• Q3: Saudi Aramco, Alibaba, AMD, Amtek, Airbnb, BP, Coca-Cola, Electronic Arts, Mondelez, Nippon Steel, Pfizer, Sony, Thomson Reuters, Toyota, Uber

Wednesday

• Germany, October unemployment rate

• New Zealand, reserve bank financial stability report

• US, Federal Reserve interest rate decision

• World, JPMorgan Global Manufacturing PMI

• Q3: Cognizant, CVS Health Corp, eBay, Estee Lauder, Fastly, Ferrari, MetLife, Next, Qualcomm, Roku, Zillow

Thursday

• Canada, September trade figures

• UK, Bank of England interest rate decision

• Europe, September unemployment rate

• AGM: Darktrace

• Q3: Adecco, BNP Paribas, BT Group, ConocoPhillips, Enel, ING, Kellogg, Moderna, Motorola Solutions, News Corp, Orsted, PayPal, Petrobras, Solvay, Stellantis, Verbund

Friday

• Europe, S&P Composite PMI

• US and Canada, October unemployment rate

• Q3: Duke Energy Corp, Itochu, SoftBank, Telefónica, Qantas

Saturday

World events

Finally, here is a rundown of other events and milestones this week.

Monday

• China, space agency launches last of three modules that comprise the Tiangong Space Station

• South Korea, five-day military drills with US

• US, Supreme Court hears from “anti-affirmative action activists” seeking to bar Howard University and the University of North Carolina from considering race in undergraduate admissions

Tuesday

• Germany, chancellor Olaf Scholz visits chemical producer BASF’s site in Schwarzheide before holding so-called “chancellor talks” in Gifhorn

• Denmark, voters head to the polls in general election

Wednesday

Thursday

• China, German chancellor Olaf Scholz on the first of a two-day trip

• Germany, G7 foreign ministers meet for two-days in Münster

• Belgium, European Commission president Ursula von der Leyen meets new Italian prime minister Giorgia Meloni

• Latvia, ECB president Christine Lagarde speaks at a conference in Riga

• UAE, Opec members and oil executives attend the Adipec conference

Friday

Saturday