Argentine assets cheer Milei's election victory with massive rally

Economic Impact - Argentina's bonds, stocks, and currency experienced significant gains following President Javier Milei's party victory in the midterm elections, which is crucial for maintaining economic reforms and U.S. financial support [1][2] - International bonds rallied between 10 and 15 cents, local stocks surged over 20%, and the peso strengthened more than 10% against the dollar, marking one of the strongest trading sessions on record [1][5] Political Context - Official election results indicated strong voter support for Milei's free-market reforms and austerity measures, with inflation reportedly decreasing since his administration began nearly two years ago [2][3] - Milei's party, La Libertad Avanza, secured over 40% of the national vote, outperforming expectations and marking a significant political shift in traditionally Peronist strongholds [3][4] Market Reactions - U.S.-listed shares of Argentine companies saw substantial increases, with financial shares rising up to 50% and the Global X MSCI Argentina ETF gaining 22% after a prior decline [5] - The international dollar bonds rose 10-15 points in early trading, reversing previous weaknesses and positioning the 2038 maturity around 74 cents on the dollar [4] Future Outlook - The election results may facilitate a faster implementation of Milei's ambitious economic overhaul, which is critical for the cash-strapped and inflation-affected nation [6] - Milei's victory speech was characterized by a moderate and cooperative tone, suggesting a willingness to collaborate with non-LLA legislators to advance reforms [4][6]