The sharp downward pressure on Banco Bradesco S.A. ADRs is primarily driven by a macro-political shock originating in Brazil. Following the presidential runoff election, market expectations for a market-friendly administrative outcome were disrupted. Investors who had aggressively positioned for fiscal consolidation and regulatory easing rushed to unwind consensus positions in Brazilian equities. The sudden shift in political sentiment triggered widespread capital flight from Latin American financial assets, with bank ADRs bearing the brunt of the repricing as concerns re-emerged regarding fiscal discipline, government debt trajectories, and potential domestic interest rate dynamics.

Compounding the equity market sell-off, the Brazilian…