Milei's party wins big in Argentina midterms, sending assets soaring.
In a shocking turn of events, Argentine President Javier Milei's party, La Libertad Avanza (LLA), has emerged victorious in Sunday's legislative elections, securing over 41% of the vote. The unexpected win has sent shockwaves through the country's financial markets, with international bonds surging between 9 and 13 cents each.
The rally in asset prices was seen as a vote of confidence in Milei's free-market reforms and deep austerity measures, which have led to a significant drop in inflation since he took office nearly two years ago. The peso has also strengthened by around 6% against the dollar, halving its initial gain.
According to analysts, the US pledge of $40 billion in financial support, including a $20 billion central bank swap line and a potential $20 billion loan facility, is seen as contingent on Milei's reform agenda. This backing appears to have given the LLA party an air of stability, allowing them to push through reforms that were previously considered out of reach.
The strong showing by Milei's party has been described as "so much larger than expected" by Thierry Larose, a portfolio manager at Vontobel Asset Management. The president's moderate and cooperative victory speech has also been seen as a signal of willingness to work with non-LLA legislators on reforms.
As a result, Argentina's international dollar bonds are pushing against historic highs posted earlier this year, while US-listed shares of Argentine companies have surged by up to 50%. Stocks traded on US exchanges have jumped 34%, and the peso has strengthened by around 5.8% against the dollar.
Analysts believe that the stronger position for Milei's party will encourage more investment in Argentina, both in financial assets and real assets. The midterms have given a longer horizon for potential foreign investments, with confidence in Milei's reform outlook potentially strengthening the currency.
However, some analysts caution that depleted dollar reserves remain a key weakness, and that the government needs to take advantage of peso strength to buy up dollars and build those reserves up. As one analyst noted, "They need to take advantage of peso strength to buy up dollars and build those reserves up, which they can do with the current regime."
In a shocking turn of events, Argentine President Javier Milei's party, La Libertad Avanza (LLA), has emerged victorious in Sunday's legislative elections, securing over 41% of the vote. The unexpected win has sent shockwaves through the country's financial markets, with international bonds surging between 9 and 13 cents each.
The rally in asset prices was seen as a vote of confidence in Milei's free-market reforms and deep austerity measures, which have led to a significant drop in inflation since he took office nearly two years ago. The peso has also strengthened by around 6% against the dollar, halving its initial gain.
According to analysts, the US pledge of $40 billion in financial support, including a $20 billion central bank swap line and a potential $20 billion loan facility, is seen as contingent on Milei's reform agenda. This backing appears to have given the LLA party an air of stability, allowing them to push through reforms that were previously considered out of reach.
The strong showing by Milei's party has been described as "so much larger than expected" by Thierry Larose, a portfolio manager at Vontobel Asset Management. The president's moderate and cooperative victory speech has also been seen as a signal of willingness to work with non-LLA legislators on reforms.
As a result, Argentina's international dollar bonds are pushing against historic highs posted earlier this year, while US-listed shares of Argentine companies have surged by up to 50%. Stocks traded on US exchanges have jumped 34%, and the peso has strengthened by around 5.8% against the dollar.
Analysts believe that the stronger position for Milei's party will encourage more investment in Argentina, both in financial assets and real assets. The midterms have given a longer horizon for potential foreign investments, with confidence in Milei's reform outlook potentially strengthening the currency.
However, some analysts caution that depleted dollar reserves remain a key weakness, and that the government needs to take advantage of peso strength to buy up dollars and build those reserves up. As one analyst noted, "They need to take advantage of peso strength to buy up dollars and build those reserves up, which they can do with the current regime."
and people are saying that if milei keeps up his reforms, argentina could actually be a good investment opportunity now. but at the same time, the fact that dollar reserves are depleted is still a major concern...like, how will they even pay for that $40 billion from the us? 
anyway, it's cool to see some economic growth happening in argentina after all the drama with macri and co 
, Milei's party is on fire 
! I mean, 41% of the vote? That's crazy 
. The economy is finally starting to turn around and it's all because of this guy's free-market reforms 
. And now the US is backing him up with a $40 billion pledge 
.
. Argentina still has some major issues to tackle 
. Depleted dollar reserves are a big concern 
. Still, I'm hyped for Milei's party 
. They're making some bold moves and it's paying off 
.
. Will Argentina become a major player on the global stage? Only time will tell 
!
that $40 billion from the US does seem like a big deal tho 
what's next, usa buying bonds from a country that's been in debt 24/7, isn't that just printing money all over again? 
. I've heard some analysts say that it could be a game-changer for the economy, but others are warning about the risks of depleted dollar reserves 
.
. Milei's party has got some big shoes to fill now that they're in power 
It's awesome that Milei's party won big and is gettin' a vote of confidence from investors. The free-market reforms are definitely payin' off, especially when it comes to inflation – that's gotta make life easier for the people there. 
. I mean, who would've thought that Argentina's president could be the one to spark a rally like this? And now we're seeing all these asset prices surging... it's like the peso has finally found its footing 
.
. But one thing's for sure: this midterms election has sent shockwaves through the financial markets and no one knows what's gonna happen next 
. Let's hope this is more than just a flash in the pan... 
. The peso surge sounds like a good thing on paper, but what about the people who can't afford basic necessities? 
️! The free-market reforms are starting to pay off, inflation is dropping, and people are feeling more confident. It's like a puzzle piece falling into place - the $40 billion from the US is helping hold everything together 
. Still, it's looking pretty good for Argentina's economy - let's see how it plays out over time 
.