Divided positions in the market
After the interference of the US in the local market, economists divided themselves into two positions. On the one hand, there are the optimists, who read the strong support from the White House as a sign of confidence intended to help normalize the economy after the “electoral shock” and sustain the exchange rate band scheme. This group of analysts also highlighted the so-called “club effect” promoted by Scott Bessent, interpreted as a warning to the market about the limits of the game when opposite is nothing more and nothing less than the global issuer of dollars. This support is seen as support not only for the Argentine President but also for the fact that Luis Caputo’s current economic and monetary policy is correct, not from a transitory point of view.
On the other side, the most cautious voices persist, warning that the maneuver could have been a one-off movement, intended to offer a more orderly transition for the Government until the October 26 elections. For this group, the exchange rate will inevitably face a correction the day after the elections. Furthermore, they consider that the exchange bands reached a situation of exhaustion and they point out that the accumulation of reserves should be central to the economic team, recalibrating the economic program, perhaps relegating the fight against inflation, but providing long-term certainty that new bailouts will not be needed.
Beyond this debate, an underlying risk remains that not even US intervention can dissipate: Future stability will ultimately depend on the electoral result and the Government’s ability to consolidate its political power after the legislative elections.
The same doubt was also transferred to international investors, with at least four key reports that circulated this week—from JPMorgan, BTG Pactual, Citi and Barclays—all focused on the intervention of the United States Treasury in the Argentine exchange market.
From JPMorgannoted that “the US Treasury addressed the currency agreement, stating that the band remains fit for purpose. We maintain our view that this framework is designed to remain in place until the midterm elections, at which time the remaining capital controls should be lifted.”
For its part, BTG Pactual considered that “the announcements and intervention reduce the risks of stress and volatility, but do not improve the chances of an electoral victory for Milei. US support should ensure that a crisis is avoided before the elections, where the Government cannot defend the exchange bands or face exchange spirals. However, an adverse electoral result will require a deeper exchange rate adjustment after the elections, regardless of the bailout United States”.
In the same line, Citi He maintained that “although local assets remain vulnerable to the political risk of the midterm elections, the intervention of the US Treasury provides room for them to continue operating, decompressing the risk prior to the October elections.”
Finally, Barclays evaluated that “the intervention acts as a dam against disruptive scenarios and reduces the risk of a disorderly devaluation or an inflationary jump with political consequences.” However, the bank warned that “a sustained exchange rate regime with an overvalued peso could lead to a new crisis, although the United States is expected to demand a solid economic framework in exchange for its support.”
This week will, without a doubt, be a “testing” week for the market regarding the role of the US Treasury. A reduction in the exchange gap is expected and a relative pax exchange rate that could extend until the general elections.
Javier Milei in the White House: the new announcements
This Tuesday, the center of attention will fall on the meeting between Donald Trump and Javier Milei at the White House. As advanced Scopethe Government aims for this meeting to conclude with announcements of commercial and financial agreements that support the national economy. In that sense, there is speculation that tariff reductions could be formalized in some 100 foreign trade positionswith rates that would vary between 0 and 10%.
In addition, the “fine print” of the Currency Swap agreement could be announced, eventually an open line for a new purchase of pesos by the US Treasury and the repurchase of debt, which was already confirmed by one of the banks that participated in Thursday’s operation, in consultation with this medium.
Key data to be released this week
Both locally and internationally, the economic agenda will be particularly loaded. In it vernacular areaon Monday the 14th —the same day of the meeting between Donald Trump and Javier Milei— the September inflation dataa key month to evaluate whether or not the pass-through after the jump in the exchange rate.
According to the estimates of the main private consulting firms, the CPI would have exceeded 2%showing an acceleration compared to the previous measurement and breaking a streak of four consecutive months below that level.
According to him Survey of Market Expectations (REM) prepared by the Central Bank based on private projections, inflation for the ninth month of 2025 would have been at 2.1%while the interannual variation would close the year around 30%.
As an advance, the inflation of the City of Buenos Aires climbed in September 2.2%compared to the 1.6% registered in August, mainly driven by a greater increase in goods than in the services category.
Another point of attention for the markets will be the Argentine Treasury tender scheduled for Wednesday 15the last one before the general elections. The next one will take place in the week after the elections. Furthermore, the Ministry of Economy will publish the fiscal results corresponding to September.
In it international frontthe panorama will also be hectic. In the United States, investors are cautiously watching the hardening of Washington’s stance towards Chinagiven the possibility of new tariffs and the stagnation of dialogue between both powers, which is also observed in the strong support of the United States for Argentina, within the framework of a political strategy to relegate the Asian country from the region.
This tension increased the perception of risk and caused Last Friday falls of up to 3% in the Nasdaq Compositealong with strong liquidations in the cryptocurrency market. This Monday will be a holiday in the USso there will be no financial operations.
Furthermore, the data of American inflation scheduled for this week will depend on the eventual reopening of the federal Administrationwhich remains partially closed since October 1st due to the lack of agreement on the spending ceiling.
Lastly, the Tuesday will become relevant Jerome Powell speech at the Federal Reserve symposium and the presentation of the corporate balance sheets of major Wall Street banks: Wells Fargo, JPMorgan Chase, Goldman Sachs and Citigroupwhich will serve as a thermometer of the North American financial system.
Source: Ambito
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