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Argentina’s dollar bonds and currency regained ground after a week of sharp losses after President Javier Milei adopted a softer tone while presenting Argentina’s 2026 budget. Milei pledged higher spending on healthcare, education, and pensions while maintaining a fiscal surplus target. He also extended an olive branch to provincial governors ahead of the October 26 midterm elections. Analysts said the move signalled a shift toward moderation to secure broader support after his party’s defeat in the Buenos Aires province earlier this month. Analysts still cite risks as growth remains slow, inflation pressures persist and uncertainty looms over the midterms. The central bank has been intervening to contain peso volatility within its trading band following the sharp drop in the currency this month.
While Argentina’s 5% 2038s were up by 1.3 points and currently trade at 57.6, yielding 9.9%, they are down by ~19% this month.
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