Brazilian lawmaker Flavio Bolsonaro said his father, former leader Jair Bolsonaro, has backed him to run in the country's 2026 presidential election, dashing the hopes of investors who had another candidate in mind to unseat President Luiz Inácio Lula da Silva.

"It's with great responsibility that I confirm the decision of Brazil's greatest political and moral leader, Jair Messias Bolsonaro, to entrust me with the mission of continuing our national project," Flavio Bolsonaro said in a social media post Friday.

Brazilian assets extended losses after Flavio Bolsonaro confirmed the decision, with the real weakening as much as 3.1%. The Ibovespa equity index slipped as much as 4.2%, and some swap-rate contracts surged more than 50 basis points.

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