He Javier Milei government faced a week full of challenges and trips marked by the defeat in the Senate – what put back to the Fiscal surplus at the center of the debate – and The rise of the official dollar (at $ 22.50). In this context – and with the legislative elections closer and closer – a Top consultancy of the City analyzed three possible scenarios for Argentine actions.
As detailed by the IEB group reportthe behavior of S&P Merval will be entirely related to the result of the mid -term elections and the performance of the ruling at the polls.
2025 elections: the three scenarios for Argentine actions
The report states that Variable rental markets had their “volatility fee” Following the return of the Tariff war and the new tariffs announced by the administration of Donald Trump. In this context, he emphasizes that the publication of the Minutes of the Federal Reserve brought a “quota of tranquility to the markets.”
Regarding the local level, from the group IEB warned that it was “Crossing by different factors“During the last week, including exchange volatility, search for coverage of in a pre -election period, and a context of high raised rate that continues to exert pressure on credits and the level of activity”, which generates a “Additional pressure” on Argentine financial assets.
In this scenario – and with the elections of October 26 more and closer – the report relieved three possible scenarios For him S&P Merval that depend on the performance of the ruling.
An excellent choice of ruling
The first scenario raised by the IEB group is one where the government makes an excellent choice, with a vote percentageS “greater than 35%” and a “victory in the province of Buenos Aires”.
This scenario can be “very positive” for the local market and “brought compression in country risk levels and a strong impulse for variable income“
A couple choice
The second analysis of the report is based on a context where the government has normal performance in the elections, with a percentage of votes greater than 30%. In this sense, the consultant said that this would result in “less support for the ruling.”
This would have a direct effect on The negotiation power of the ruling party in Congress, with a smaller number of its own benches to carry out their economic policy. For the local market, this would mean a “limited upside for the equity” on Argentine actions.
A bad choice of ruling
The last of the scenarios raised by the report is one where the government of Javier Milei has a result below 30% In the votes obtained. “This would result in a lack of support for Lla, reducing future expectations,” they detailed from the IEB group.
This hypothetical more adverse frame for the government could trigger in a “Even deeper correction for local Variable Income”
Industry data
How added to her analysis, the consultant also focused on the data of Industrial production that were released during the last week.
“Despite continuing to show an improvement in monthly terms (+2.2% in May) they still show A 9% year -on -year correction, reflecting the challenging context that continues to experience the industrial sector“They concluded.
The ADRs sank up to 6% and S&P Merval played minimum of three months, against doubts about fiscal balance
He S&P Merval and the sovereign bonds closed the week in redbeaten by the debates that were generated around the Approval in the Senate of the pension initiatives, which the Government assumes that they compromise the fiscal balance. The negative reaction of the markets was felt strongly at the close of Friday.
The leading Buenos Aires index backed down 3%, located at 2,023,573,330 basic points, while Its dollars fell to minimal not seen in the last three months. Among the most punished actions were South Gas Transporter (-5.8%), BBVA (-5.2%) and Grupo Supervielle (-4.3%).
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The bad weather also moved to Wall Street, where the Argentine ADRs recorded generalized casualties of up to 6%. The most pronounced losses corresponded again to the three firms mentioned.
The political background that explains this stock market was the approval, on Thursday, of a bill in the Senate that contemplates A 7.2% increase in pension assets and a rise in the reinforcement bonus of $ 70,000 to $ 110,000. The initiative was sanctioned with 42 affirmative votes, 17 against and 3 abstentions.
From the Casa Rosada, the answer was immediate and without nuances. “We are going to veto. And, even if the veto falls, we will prosecute it,” President Javier Milei said, replicating the warning that the Chief of Cabinet, Guillermo Francos, with identical words.
Currently, the minimum for retirees and pensioners amounts to $ 309,294, while the maximum is $ 2.081,261. With the 7.2%update, the amounts would go to $ 331,563 and $ 2.231,111, respectively.
Source: Ambito
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