South of Madrid, capital of Brazil - bizarre! (7)
I believe the answer is:
surreal
'bizarre' is the definition.
(I've seen this in another clue)
'south of madrid capital of brazil' is the wordplay.
'south of madrid' becomes 'sur' ('south' in Spanish).
'capital of brazil' becomes 'real' (Brazilian currency - 'capital' can mean money).
'sur'+'real'='SURREAL'
(Other definitions for surreal that I've seen before include "Not of this world" , "Dali being so?" , "Weird - like Dali's paintings?" , "Like Dada image, perhaps" , "Odd" .)