Argentine markets eye rally after Milei’s party wins midterms
President Javier Milei’s La Libertad Avanza (LLA) won Argentina’s midterm legislative elections. With more than 90% of ballots counted, LLA secured roughly 41% of the vote and strengthened its presence in both chambers of Congress.
Investors now anticipate a positive market reaction in the coming sessions. Portfolio managers expect US dollar–denominated sovereign bonds to firm and spreads along the government curve to narrow, alongside rising prices for Argentine equities and local‑currency bonds.
On over‑the‑counter crypto venues, the peso strengthened on Monday night following the results. Market participants attribute this to the closing of long US‑dollar positions and a reassessment of political risk.
Milei’s win reduces doubts about continued backing from the United States. Ahead of the vote, authorities announced a US$20bn credit line and and said they were exploring additional support. Traders estimate recent interventions to support the peso at more than US$1bn. That helped keep the exchange rate within an indicated corridor and curb depreciation pressures.
That said, the overall market backdrop remains mixed. In autumn, yields on some sovereign bonds maturing in 2035 climbed above 17% annually, and the peso hit new lows on several sessions. Investors will therefore assess not only LLA’s midterm performance and seat count, but also the administration’s capacity to assemble cross‑party support for key bills from fiscal consolidation to deregulation at the provincial level.
Crypto remains part of the policy agenda. Current rules allow the use of crypto in settlement contracts, require registration of virtual asset service providers (VASP), and pilot tokenisation of real‑world assets. The midterm result increases the likelihood that this course continues: authorities may see renewed demand for tax regularisation of digital assets, while clearer rules could draw institutional participation.
In the weeks ahead, four indicators matter most: the peso’s exchange rate on the free market and in crypto pairs; movements in sovereign bond spreads; stablecoin trading volumes; and the pace of legislative progress in Congress.
If the peso holds, spreads tighten, stablecoin volumes avoid abnormal spikes, and core bills advance, these factors would support further disinflation.
