Lula’s third act

Luiz Inacio Lula da Silva is returning to center stage after a bruising election that saw him beat Jair Bolsonaro to retake Brazil’s preside [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Luiz Inacio Lula da Silva is returning to center stage after a bruising election that saw him beat Jair Bolsonaro to retake Brazil’s presidency. He may still have a mountain to climb. The leftist former union leader, who first came to power two decades ago, took 50.9% of the vote to Bolsonaro’s 49.1% in yesterday’s runoff to set up a third term at the helm of Latin America’s largest economy. It’s a remarkable outcome for a politician who just three years ago was in jail for corruption, charges later dropped on procedural grounds. [Simone Iglesias]( lays out in this [profile]( how Lula overcame his darkest days to pull off the historic comeback. Key reading: - [Lula Edges Out Bolsonaro to Win the Presidency of Divided Brazil]( - [Jail Term to a Third Term: The Inside Story of Lula’s Comeback]( - [Brazil Markets May See ‘Relief Rally’ Amid Smooth Election]( - [Brazil Live Election Results and Map]( - [An Investor's Guide to Brazil’s Presidential Runoff]( Yet his victory by the narrowest margin in Brazil’s modern history underscores the divisions in society exacerbated by four years of Bolsonaro. The incumbent didn’t comment on his defeat yesterday. Early trading suggests markets may rally given several Bolsonaro allies and congressional leaders accepted the result, reducing the chances of a contested outcome. Bolsonaro repeatedly clashed with the electoral authorities in the run up to the vote. More broadly, this is the first time a sitting president has lost a re-election bid in Brazil, illustrating the difficulties incumbents have to retain power in the aftermath of the Covid-19 pandemic that ravaged Latin America, exposing inequalities. It follows a pattern seen across the region in the past 18 months with Colombia, Chile and Peru electing leftist governments over center-right administrations. In his victory speech, Lula stressed that his victory means the return of a more active international role, pledging that “Brazil is back.” But with a divided congress, the largest states in opposition hands and little room to maneuver, Lula will have to shore up his administration at home before making a wider impact. For Lula, the hardest part of his political journey may still lie ahead. — [Juan Pablo Spinetto]( Lula addresses supporters in Sao Paulo after winning the election. Photographer: Tuane Fernandes/Bloomberg Click [here]( to follow Bloomberg Politics on Facebook and if you’re enjoying this newsletter, click [here]( to sign up for Balance of Power. Global Headlines More strikes | Ukraine said Russia conducted a wave of missile [attacks]( across the country today including against critical infrastructure in Kyiv, leaving parts of the capital without electricity and water. The assault came after Moscow accused Ukraine of weekend drone attacks against its Black Sea fleet — claims disputed by Kyiv — and [pulled out]( of a key deal allowing safe passage of Ukrainian grain exports. - Wheat futures [surged]( after Russia quit the agreement seen as critical for easing tight world supplies and controlling global food costs. - The government in Kyiv along with Turkey and the United Nations agreed to have vessels carrying food from Ukrainian ports sail today, [pushing back]( against Russia. - Follow our rolling coverage of the war [here](. Reality check | Rishi Sunak won an endorsement from financial markets in his first days as UK prime minister, and even some favorable polling numbers after weeks of disastrous ratings for the ruling Conservative Party. His first full week in power may be [more challenging](. Sunak’s economic policy is set to face scrutiny as the Bank of England delivers what could be its biggest interest-rate hike in more than 30 years, and questions continue to swirl over security breaches by his Home Secretary Suella Braverman. Robust labor markets are defying central bankers’ efforts to tamp down inflation and economists’ predictions that recession is around the corner. A strong job market is good for workers, but it’s bad for inflation, signalling to the world’s policymakers that they [can’t ease up]( on the most aggressive pace of interest rate hikes in decades. US Midterms latest - [GOP Leader Pledges China Investigation If Republicans Win House]( - [Inflation, Economy Are Top of Mind for US Voters in Midterm Poll]( - [China Dismisses ‘Fabricated’ Virus Leak Theory Revived by Report]( Trade tactics | The US and its European allies have cooperated on restricting exports to Moscow since President Vladimir Putin invaded Ukraine. The Biden administration has now raised the idea of using some of the same information sharing and enforcement coordination to reinforce its own [bilateral restrictions]( on exports to China, sources tell [Jorge Valero](. The subject came up as European Union and US officials negotiate the agenda for their next high-level trade forum in early December. - US Secretary of State Antony Blinken spoke with Chinese Foreign Minister Wang Yi, the latest in a series of [exchanges]( ahead of a possible face-to-face meeting between their presidents as soon as the Group of 20 summit in Bali next month. Best of Bloomberg Opinion - [It’s Better to Mine Rainforests Than Farm Them: David Fickling]( - [As Israel Votes, Its Arab Citizens Hold the Key: Bobby Ghosh]( - [A Permanent US-Saudi Rift? Watch These 3 Events: Hussein Ibish]( Challenging times | South Korean President Yoon Suk Yeol’s [handling]( of a deadly crowd surge in Seoul that killed more than 150 people will give him a chance to prove to critics he can lead, or hand his opponents more fodder to paint his administration as incompetent. Yoon convened emergency meetings just hours after the crush occurred late Saturday night in the popular nightlife district of Itaewon, where tens of thousands were celebrating Halloween. - Yoon’s government has launched an [investigation]( into the tragedy, one of the country’s deadliest incidents in years. Forensic investigators at the site of the deadly crowd crush. Photographer: SeongJoon Cho/Bloomberg Explainers you can use - [Netanyahu Banks Comeback on an Alliance With Israel’s Far Right]( - [How a Mink Cull Sent Denmark Into Tuesday’s Election]( - [The Front Trunk Is Electric Cars’ Most Divisive Feature]( New scrutiny | Three days after Elon Musk bought Twitter, the tech billionaire posted and deleted a tweet spreading a baseless anti-LGBTQ conspiracy theory about the attack on the husband of House Speaker Nancy Pelosi in San Francisco. The episode underscored the pressures that Musk, a self-styled “free speech absolutist,” now faces in running the popular social-media platform — particularly in how to [place limits]( on misinformation and hate speech on its service. Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - At least 134 people were killed and several others injured in western India after a suspension bridge [collapsed](. - The IMF expects energy exporters in the Middle East and Central Asia to earn a [cumulative windfall]( of about $1 trillion through 2026. - A Shanghai official offered more assurances about water supplies for the financial hub after worries about [contamination]( from the sea caused a brief panic. - European firms grappling with high inflation and soaring operating costs are seeking fresh short-term liquidity lines in an echo of the [worst days]( of the coronavirus pandemic. - China updated its decades-old women’s law to improve gender equality, days after the Communist Party [excluded women]( from its upper echelons for the first time in 25 years. - Hong Kong’s economy recorded its [worst quarter]( in more than two years as weak demand and pandemic isolation battered the financial hub and increased the likelihood the city will end the year in contraction for the third time since 2019. Thanks to the 20 people who answered Friday’s quiz and congratulations to Jude Chukwudozie, who was the first to name Romania as the country whose defense minister resigned after suggesting Ukraine may have to cede territory to Russia in any talks to end the war. And finally … A sudden [spike]( in European exports of washing machines, refrigerators and even electric breast pumps to Russia’s neighbors is raising concerns among officials the trade boom may be helping Putin’s war machine in Ukraine. [Alberto Nardelli](, [Bryce Baschuk]( and [Marc Champion]( report exclusively that while some trade via Eurasian states into Russia may be opportunistic businesses making up for shortfalls of imports from elsewhere, EU officials worry at least some of the goods and their components are finding their way into military use. A destroyed Russian tank near Izyum, eastern Ukraine. Photographer: Sergey Bobok/AFP/Getty Images Like getting this newsletter? 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