Argentina’s Markets Soar After Milei’s Midterm Win Boosts Reform Hopes

Argentina’s financial markets erupted in optimism on Monday after President Javier Milei’s La Libertad Avanza (LLA) party scored a decisive midterm victory, cementing its mandate to pursue sweeping economic reforms backed by a $40 billion US support package.

The reaction was swift: international bonds surged up to 13 cents, stocks jumped more than 20 percent, and the peso strengthened nearly 6 percent against the dollar. Investors interpreted the results as a resounding endorsement of Milei’s austerity and free-market overhaul, and a signal that Washington’s financial lifeline will remain intact.

Official results showed Milei’s LLA took over 40 percent of the national vote, including a narrow but symbolic win in Buenos Aires province, long a Peronist stronghold. The result consolidates Milei’s grip on Congress and gives him a clearer path to advance deregulation, spending cuts, and a long-term stabilization plan.

In his victory speech, Milei struck a conciliatory tone, promising cooperation with moderates in order to “rebuild Argentina’s future.” Analysts said this shift from confrontation to pragmatism could prove critical in maintaining both market confidence and US goodwill.

Argentina’s 2038 bonds climbed 13 cents to 73 cents on the dollar, nearing record highs. The Global X MSCI Argentina ETF leapt 20 percent, while some US-listed Argentine financials surged 50 percent.

The peso briefly strengthened as much as 13 percent to 1,320 per USD before settling at 1,410, still nearly 6 percent firmer on the day.

The turnaround comes after months of market turmoil. In September, the peso had slumped to record lows, and Argentine debt ranked among the worst-performing emerging-market assets. Now, investors view the midterms as a turning point that could extend Argentina’s investment horizon.

The US government’s $40 billion support pledge, split between a $20 billion central-bank swap line and a $20 billion facility, has tied continued assistance to Milei’s reform progress. With inflation finally easing and fiscal discipline gaining traction, Washington’s backing adds weight to Argentina’s recovery narrative.

Still, challenges remain: unemployment is high, poverty rates are stubborn, and reforms could face resistance from entrenched unions and provincial leaders. But for now, optimism prevails.