By Libby George and Dhara Ranasinghe
LONDON, April 10 (Reuters) - Voters in Hungary could deliver a boon to bond investors, while Peru's weekend polls will help determine the next step for its economy, the latest in a string of key elections worldwide this year.
Here's a look at the races financial markets are watching most closely:
HUNGARY
Sunday elections in Hungary pose the biggest threat so far to nationalist Prime Minister Viktor Orban's 16-year rule. Centre-right opposition party Tisza is leading in most polls.
Orban has cut taxes and hiked wages to placate voters in an economy where growth has lagged its neighbours. He has also angered much of Europe by blocking loans to Ukraine.
A win for Tisza's Peter Magyar, investors say, could enable access to some of the 18 billion euros ($21 billion) of EU funding that has been frozen due to concerns over democratic standards.
Goldman Sachs economists say this would "likely lead to a notable appreciation of Hungarian assets."
PERU
In Peru, two right-wing candidates lead the polls for Sunday's first-round presidential election, but Bank of America said most contenders "do not seem to represent a major threat" to Peru's orthodox economic model. Voters will also elect members of Congress.
The country has had eight presidents since 2018, after years of impeachments and corruption scandals, but growth in nearly all sectors has boosted the economy.
Bank of America warned that a chaotic election, like the 2021 race that was marred by turmoil and fraud allegations, could trigger capital flight.
If no candidate clears the 50% threshold, a second round is scheduled for June 7.
UNITED KINGDOM
Local elections don't usually attract the attention of foreign investors but those in the UK on May 7 might well. Prime Minister Keir Starmer's Labour Party is trailing the populist Reform UK and the left-wing Green Party in the polls and has struggled to deliver on promises to boost economic growth.
The bond market is especially sensitive to signs that the fiscally restrained Starmer might be replaced, while the pound could weaken.
The Iran war has dampened speculation that Starmer will be ousted soon. Still, online prediction market platform Polymarket gives a 56% chance of such a move by year-end. The next national election must be held by August 2029.
COLOMBIA
Colombia's presidential race - the first round is scheduled for May 31 - remains open after divided results in March congressional elections.
Current leftist President Gustavo Petro has clashed with the central bank and sought to enact an economic emergency decree. Some investors have cheered the rising fortunes of centre-right candidate Paloma Valencia.
"We are inclined to hold a constructive view, as political conditions still support a swing toward pro-market policies," Barclays economist Alejandro Arreaza said in a note.
ETHIOPIA AND ZAMBIA
Ethiopia and Zambia, which have both defaulted on their debt, hold summer elections, with the economy a top concern.
Investors have hailed Zambia's economic reforms and growing copper production, while rising gold and coffee exports and foreign exchange reforms have boosted Ethiopia's prospects.
Ethiopian Prime Minister Abiy Ahmed's Prosperity Party is almost certain to win in June amid opposition boycotts and security concerns that could hinder voting.
Zambia's incumbent President Hakainde Hichilema is also tipped to win in August, but energy and fertiliser price spikes related to the Iran war could hurt. Ratings agency S&P says the election poses a risk to policy continuity, just as the government's fiscal consolidation efforts start to bear fruit.
ISRAEL
Parliamentary elections in Israel, expected in October, are viewed as a referendum on Prime Minister Benjamin Netanyahu.
Polling before the Iran war suggested that Netanyahu's right-wing coalition would struggle to win enough seats to form a government, and polls showed the war in Iran has done little to improve his standing.
Israel's economy had rebounded in 2025, and was expected to further improve in 2026, before the war began. The uncertainty could add to volatility in the shekel currency and government bonds.
BRAZIL
Brazil's leftist President Luiz Inacio Lula da Silva is tied in an October race against right-wing senator Flavio Bolsonaro, the son of former President Jair Bolsonaro.
Seats in the lower house, two-thirds of the Senate and all 27 state governors are also up for grabs.
Inflation has moderated and joblessness hit a record low in December, but last year's 2.3% economic growth was the weakest since the COVID pandemic, and household debt service is at its highest since the series began in 2011.
Oxford Economics' Felipe Camargo said a centre-right government under Bolsonaro could yield a "goldilocks scenario for markets" including a focus on lowering inflation and reversing a growing debt-to-GDP ratio.
UNITED STATES
The November mid-term elections will determine who controls Congress and are shaping up as a major test for U.S. President Donald Trump.
Trump's approval ratings have hit their lowest level ever, leaving his Republican Party at risk of losing its narrow majorities in Congress. Polls show sizable majorities of Americans are opposed to the war in the Middle East and frustrated by the rising cost of gasoline.
Analysts say uncertainty ahead of the vote could weigh on the dollar and stocks, although for now the election is likely to be overshadowed by Iran.
"If Trump wants a chance to get affordability back down, well in advance of the midterms... the timing is very tight," said Grant Johnsey, head of market solutions at Northern Trust.
(Reporting by Libby George and Dhara Ranasinghe; Editing by Karin Strohecker and Sharon Singleton)
