Argentina's markets keep wary eye on primary vote after 2019 crash
By Walter Bianchi and Jorge Otaola
BUENOS AIRES (Reuters) — Argentine traders are keeping a close eye on primary elections on Sunday, which will reveal the likely outcome of the Oct. 22 general ballot, with a major market crash after the same vote in 2019 still seared in their memories.
The primary, which unusually is an obligatory nationwide vote, defines internal leadership battles and acts as a dry run for the general election. It will show how likely the ruling Peronist coalition is to lose power to the main conservative opposition or even a far-right libertarian.
The primary vote four years ago delivered a shock landslide defeat to the government of conservative then-President Mauricio Macri, sparking a crash in bonds, equities and the peso currency that Argentina has yet to fully recover from.
«The election, even though it's a primary, could define the future vision of the market for the years ahead,» Mauro Natalucci from local brokerage Rava Bursátil said on Friday.
The candidates from the main two political blocs are quite moderate. Ex-security tsar Patricia Bullrich and Buenos Aires city Mayor Horacio Larreta are vying to lead the opposition, and Economy Minister Sergio Massa is a unity candidate for the Peronists.
That should temper market reaction to the vote. But with pollsters less than confident about their predictions, outsider libertarian candidate Javier Milei could give markets a shock if he wins much more than the one-fifth of the votes that polls give him now.
Milei, who has risen on the back of voter anger at inflation near 116% and declining spending power that has left around four-in-10 people in poverty, has pledged to shutter the central bank and dollarize the country's economy.
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