"Argentina's bonds, stocks and currency are surging after President Javier Milei's party won an overwhelming victory in a Sunday midterm election, a key requisite to keep economic reforms on track and a United States financial backstop in place. On Monday, international bonds rallied between 9 and 13 cents each, local stocks jumped over 20 percent and the peso strengthened some 6 percent to the dollar, halving its initial rally. Official results in Argentina's Sunday legislative elections show voters strongly backed Milei's free-market reforms and deep austerity measures, with inflation falling sharply since he took office nearly two years ago."
"The unexpectedly strong showing came after the US pledged a combined $40bn to support Milei a $20bn central bank swap line and a potential $20bn loan facility and implied the backing was contingent on Milei's reform agenda. His victory was so, so much larger than expected, said Thierry Larose, portfolio manager at Vontobel Asset Management. Previously he was in a state of survival, and now he's in a very strong position to try to form tactical alliances and push some reforms that were completely out of reach."
"The president's party, La Libertad Avanza (LLA), received 41.5 percent of the vote in Buenos Aires province compared with 40.8 percent for the opposition Peronist coalition, according to official results. The province has long been a Peronist stronghold, marking a dramatic political shift. Nationally, LLA took over 40 percent of the vote, a much better-than-expected result. Critically, Milei's victory speech was notably moderate and cooperative, signaling willingness to work with non-LLA legislators on reforms, Christine Reed, emerging market fixed income portfolio manager at Ninety One, said in a note."
Markets rallied strongly after La Libertad Avanza won a decisive midterm victory, sending international bonds up 9–13 cents, local stocks over 20%, and the peso about 6% stronger versus the dollar. The US pledged a combined $40bn support package — a $20bn central bank swap line and a potential $20bn loan facility — with backing tied to Milei's reform agenda. LLA secured over 40% nationally and 41.5% in Buenos Aires province, displacing a long-standing Peronist stronghold. Milei's victory speech struck a moderate, cooperative tone, improving prospects for coalition-building and implementation of free-market austerity measures.
Read at www.aljazeera.com
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