Javier Milei’s Big Win Sparks Investor Optimism and Peso Rally
Argentina Set for Market Rally After Javier Milei’s Landslide Win
Argentina’s financial markets are gearing up for a strong rally after President Javier Milei’s sweeping victory in the latest legislative elections — a result that exceeded even the most optimistic forecasts. Investors are breathing a sigh of relief, seeing the outcome as a green light for Milei’s ambitious economic reforms.
With over 90% of votes counted, Milei’s party captured 41% of the national vote, securing 64 of 127 seats in the lower house of Congress and 13 of 24 Senate seats up for grabs. This performance far outpaced expectations, as markets had predicted around 30%.
Even before markets officially opened, signs of enthusiasm were visible — the Argentine peso gained ground in overnight crypto trading following the election results.
Investors Regain Confidence in Milei’s Reform Agenda
“The scale of Milei’s victory ranks at the most optimistic end of pre-election expectations,” said Alejo Czerwonko, Chief Investment Officer for Emerging Markets at UBS Global Wealth Management. “His party now holds the political capital needed to accelerate structural reforms.”
This decisive win gives Milei the leverage he needs to push forward his sweeping economic overhaul. His administration has promised deep spending cuts, deregulation, and a commitment to free-market policies — moves that have been both celebrated and criticized in Argentina’s politically divided climate.
US Support and Economic Stability
The results could also reassure Washington, which has been a key financial lifeline for Argentina. Ahead of the vote, the Trump administration extended a $20 billion currency swap line with Argentina’s central bank and discussed an additional $20 billion financing package to stabilize the peso.
Former President Donald Trump made his stance clear: “If he wins we’re staying with him, and if he doesn’t win we’re gone.” Milei’s victory, therefore, not only secures his domestic mandate but also strengthens Argentina’s relationship with the US — a crucial factor for investor confidence.
Market Reaction: Bonds and Peso Expected to Surge
Financial analysts expect a wave of optimism in Argentina’s markets as trading opens. “I’d expect a nice recovery in asset prices tomorrow — led by dollar bonds,” said Christine Reed, a portfolio manager at Ninety One in New York.
Local bonds are also forecast to rise sharply. Matias Montes, strategist at EMFI Securities, added that many traders were heavily positioned in US dollars before the election. “Everyone is going to rush to close positions,” he said, predicting a significant peso rebound.
Early crypto market activity supports that view — the peso strengthened to 1,435 per dollar, signaling an almost 5% gain from Friday’s close.
Milei’s Economic Revolution and Market Rollercoaster
Since his rise to power in 2023, Milei has been shaking up Argentina’s political and economic system. His outspoken libertarian views, calls to dollarize the economy, and promises to shrink the state have divided opinions — but they’ve undeniably sparked market enthusiasm.
Following his election, Argentine stocks and bonds soared, with the nation’s dollar debt returning 144% — one of the best performances among emerging markets, behind only Lebanon and Ecuador.
However, those gains faltered last month when Milei’s party underperformed in local elections, sparking doubts about his ability to pass reforms through Congress. Yields on government bonds due 2035 jumped above 17%, and the peso dropped as much as 7% in one session.
The Role of the US Treasury and IMF
The US Treasury stepped in to stabilize the situation, providing dollar liquidity and supporting the peso’s exchange rate — a critical move to contain inflation. Argentina’s agreement with the International Monetary Fund, reached in April, set trading boundaries for the peso to prevent sharp devaluations.
While neither Washington nor Buenos Aires has disclosed the exact scale of the intervention, traders estimate that the US spent over $1 billion to support the peso. Despite these efforts, the currency had been hovering near its weakest point until the election results broke the downward trend.
Renewed Mandate and Path Forward
Kathryn Exum, co-head of sovereign research at Gramercy Funds Management, described Milei’s victory as a turning point: “Milei and his party have emerged as big winners with a renewed mandate. With this win, governors and politicians should have the willingness to work with him under the right conditions, opening the door for reforms.”
Before the vote, Wall Street analysts were expecting Milei to capture roughly one-third of the vote — just enough to secure veto power and prevent Congress from blocking his agenda. The much stronger result now gives him a commanding position to negotiate and push through his reform package.
Joaquin Bagues, Managing Director at Grit Capital Group in Buenos Aires, agreed: “This puts Milei’s party in good shape to negotiate with other groups to pass the reforms.”
Investors Bet on Stability and Growth
For investors, Milei’s victory signals both political stability and a clear path forward for Argentina’s struggling economy. His administration has promised to tackle runaway inflation, reduce the fiscal deficit, and rebuild foreign reserves — all critical to restoring investor trust.
Argentina’s bondholders, who endured years of defaults and restructuring, are once again seeing potential for long-term gains. Dollar-denominated bonds and equities tied to energy, agriculture, and finance are expected to lead the post-election rally.
If Milei can balance his radical economic vision with pragmatic policymaking, analysts believe Argentina could reemerge as one of Latin America’s most promising investment destinations.
What Comes Next for Argentina
With a renewed mandate and Washington’s backing, Milei now faces the challenge of turning his bold promises into reality. Key reforms — including tax cuts, deregulation, and potential privatizations — will likely dominate the legislative agenda in the coming months.
Markets will be watching closely to see whether Milei can convert his political momentum into tangible economic recovery. For now, though, optimism is running high.
Argentina’s battered economy, long plagued by inflation and currency crises, might finally be entering a new phase — one powered by investor confidence and a president who has proved he can win big, both at the ballot box and in the markets.