Argentina: Markets soar after Milei’s Midterm election victory

Monday 27 October 2025 - 15:30

By: Sahili Aya

Argentina: Markets soar after Milei’s Midterm election victory

Argentina’s financial markets surged on Monday following President Javier Milei’s party’s decisive victory in Sunday’s legislative elections, reinforcing investor confidence in the government’s economic reforms and securing continued U.S. financial support.

Stocks, bonds, and currency rally

Local equities jumped over 20%, while the peso strengthened more than 10% against the U.S. dollar. International Argentine bonds also gained 10-15 cents each, with the 2038 maturity rising to around 74 cents on the dollar. Analysts described it as one of the strongest trading sessions in recent history.

The results show strong voter support for Milei’s free-market and austerity policies, which have contributed to a marked decline in inflation since he assumed office nearly two years ago.

U.S. backing and reform agenda

The unexpected landslide followed a $40 billion U.S. financial support pledge, including a $20 billion central bank swap line and a potential $20 billion loan facility. The backing is seen as contingent on Milei’s reform agenda.

“His victory was far larger than expected,” said Thierry Larose, portfolio manager at Vontobel Asset Management. “Previously he was in a state of survival, and now he’s in a strong position to form alliances and push reforms that were previously out of reach.”

Political shift in Buenos Aires

Milei’s party, La Libertad Avanza (LLA), received 41.5% of the vote in Buenos Aires province, narrowly surpassing the opposition Peronist coalition at 40.8%. This result marks a significant political shift in a traditional Peronist stronghold. Nationally, LLA secured over 40% of votes, exceeding expectations.

Analysts also noted Milei’s moderate and cooperative victory speech, signaling readiness to collaborate with non-LLA legislators to advance reforms.