Milei's Argentina win expected to pressure peso, buoy bonds
By Jorgelina do Rosario
BUENOS AIRES (Reuters) — Argentine far-right libertarian Javier Milei's strong win in Argentina's presidential election run-off will likely put downward pressure on the peso currency though could play better among bondholders, analysts said after the result.
The outsider radical, who has pledged to «burn down» the central bank and dollarize the economy, beat Peronist economy chief Sergio Massa in the Sunday vote, though struck a measured tone in his closely watched first speech as president-elect.
The South American country's markets are closed on Monday for a local holiday, so will only fully trade on Tuesday. Overseas-listed sovereign bonds and some equities will trade, mainly in Europe and the United States.
«In the short term bonds are going to react positively, but we expect pressure in the FX market due to the uncertainty until Dec. 10,» said Juan Manuel Pazos, chief economist at TPCG in Buenos Aires, referring to the date Milei takes office.
In his first speech Milei pledged speedy reforms to fix an economy mired in crisis. Inflation is at 143%, foreign currency reserves are in the red and a recession is looming. But he also signaled moderation and thanked his mainstream conservative backers Mauricio Macri and Patricia Bullrich.
«The fact that Milei said he is willing to broaden the political support and also thanking both Macri and Bullrich is positive,» said Martin Castellano, head of LatAm research for the Institute of International Finance (IIF).
«It will help stabilize market sentiment in the next few days. It was a moderate speech, but without big definitions.»
Milei, a TV pundit-turned lawmaker with little political experience, rode a wave of voter anger, at times during the campaign
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