Why did they suddenly turn in just 24 hours?

Market Rebounds After Libra Scandal: Hear’s What You Need to No

Just 24 hours after a significant dip in the S&P Merval index following the Libra cryptocurrency scandal involving President Javier Milei, the Argentine market experienced a remarkable turnaround on Tuesday. The leading Byma panel surged by 6.1% following monday’s 5.6% drop.

International Investors Show Resilience

The market had anxiously awaited a signal from international investors about their stance on the Libra controversy. Their response was largely positive, with adrs reversing early losses and closing mostly higher. South gas transporter led the charge with a 2.7% gain, followed by Telecom (+1.7%) and Galicia Financial group (+1.4%).

Optimism Fueled by IMF Deal Expectations and Wall Street Gains

While Wall street’s record-breaking performance contributed to the positive sentiment, market analysts believe the anticipation of progress in the agreement with the International Monetary fund (IMF) played a key role. President Milei’s upcoming visit to the United States this week has fueled rumors of imminent announcements regarding the negotiations, possibly boosting local financial assets.

Reports from major US banks, including Bofa and Goldman Sachs, further solidified investor confidence by downplaying the impact of the Libra scandal and reaffirming their commitment to Argentina.

Fixed Income Market Sees Moderate Fluctuations

Despite the overall market rebound, Argentina’s sovereign bonds in dollars experienced a 2% average decline on Wall Street, though the drop was less pronounced in the local market.Consequently, country risk edged up by 3.1% to 696 basis points, according to JP Morgan.

“The dollar debt had a normal day with falls that were quite in line with what we saw in other credits in the region such as Brazil, Chile, Mexico or Peru; as always adjusting for the fact that Argentina has greater volatility,” commented an operator interviewed by Ambito Financial .

Experts Weigh In on Long-Term Implications

“The Libra scandal will not have great long-term repercussions,” Pedro Siaba Serrate,Head of Research & Strategy at PPI,told Ambito Financial, echoing the sentiments of traders. “The probability of a political trial is very low and there are not great political consequences.

He added,”Beyond that,we will have to wait for opinion polls and see what happens with pending votes in the Senate. The latest macro data, such as the fiscal result and the January CPI, with very good readings, hold this hypothesis.”

Political Landscape and Its Impact on Markets

Delphi Investment emphasized that local financial assets, already influenced by global events, are also susceptible to specific local issues. They highlighted the upcoming legislative elections in 2025 as a significant driver.

Delphos also noted the recent political trajectory: “Locally, the ruling party seemed to have the paved road ahead of them facing October 2025. But the latest poll, closed last Friday, showed national vote intention at 36% for la Libertad Avanza, compared to 16% for Kirchnerism and 9% for the PRO. For the first time without agreement with the PRO, La Libertad Avanza appeared above Kirchnerism in the province of Buenos Aires.”

The analyst firm questioned whether the scandal would ultimately affect people’s perceptions of President Milei, impacting his image and potentially influencing voter sentiment in the upcoming elections.

“Probably cause a lot of noise, but the doubt is whether it will have any tangible impact on the positive image of the government,” Delphos concluded.

Economic stability Remains a Key Factor

Despite the political uncertainty, delphi Investment pointed out a critical reality: “In many political episodes in the world, the economy ended up sending.”

By highlighting the “it is the economy, stupid” mantra made famous by Bill clinton, they emphasized the weight of economic performance in shaping political outcomes.

Currently, Argentina possesses some strong economic indicators, including twin surpluses in the fiscal and trade sectors (even though the trade surplus was challenged in January), low inflation, and a controlled exchange gap. These factors provide a solid foundation for the government, facing the Libra scandal and its potential consequences.

how does the anticipated progress in IMF negotiations and President Milei’s upcoming US visit influence market sentiment?

Expert Insights: Navigating Global Markets’ Resilience post-Libra Scandal

In the aftermath of the Libra cryptocurrency scandal involving Argentine President Javier Milei,Archyde’sгей arquitectura financial news editor caught up wiht global market strategist,Lucas entourage,Chief Investment Officer at Fortress Global Investments,for insights on the market’s rebound and long-term implications.

Market Reversal: A Sign of Investor Resilience

Archyde (Archy): Lucas, thank you for joining us today. Just 24 hours after steep declines following the Libra scandal, we witnessed a remarkable turnaround in the Argentine market. What’s yoru take on this resilience shown by international investors?

Lucas entourage: Thank you for having me. I believe investors are looking beyond the short-term noise and focusing on fundamentals.The market corrections we saw where a normal response to uncertainty, but the swift rebound indicates that investors are bullish on Argentina’s economic prospects and are taking a pragmatic approach to the Libra scandal.

IMF Deal Optimism and Wall Street boost

Archy: Economic indicators and President Milei’s upcoming visit to the US seem to have fueled optimism. Can you elaborate on how these factors are influencing the market sentiment?

Lucas: Absolutely. The anticipation of progress in the IMF negotiations and possibly positive announcements from President Milei’s visit have certainly boosted investor confidence. combine that with Wall Street’s record-breaking performance, and you’ve got a recipe for a market rebound. Local financial assets are benefiting from both global and domestic positive signals.

Fixed Income: A moderate Blip on the Radar

Archy: Even tho the overall market bounced back, Argentine sovereign bonds experienced a decline on Wall Street. How do you interpret this discrepancy?

Lucas: It’s not uncommon to see some lag or moderate fluctuations in different market segments. The decline in sovereign bonds was in line with other regional credits and wasn’t excessively pronounced. Moreover, the local market wasn’t as affected as Wall Street, which shows resilience and infrequent investor concerns about Argentina’s debt situation.

Long-Term Implications: Lessons Learned

Archy: With the impeachment process unlikely and no significant political consequences for Milei, what are the long-term implications of the Libra scandal for Argentine markets and investors?

Lucas: I believe the Libra scandal will serve as a cautionary tale, heightening investors’ scrutiny of political risks and corporate governance. However, unless we see a significant change in Argentina’s economic trajectory or a shift in political sentiment, the long-term impact should remain limited. As always, fundamentals will dictate the market’s direction in the long run.

Political Landscape: Beyond the Scandal

Archy: Delphos investment raised concerns about the scandal potentially influencing voter sentiment in the upcoming legislative elections. How do you envision the political landscape evolving,and what implications might it have for markets?

Lucas: The political landscape remains dynamic,and the upcoming elections will indeed play a crucial role. While the Libra scandal may generate some noise,I’m not yet convinced it will tangible impact voter sentiment. Economic performance, as demonstrated by Clinton’s famous mantra, will continue to be a key factor. Provided that Argentina maintains its economic stability, it will provide a solid foundation for the government, regardless of the scandal’s political implications.

Thank you, Lucas, for sharing your insights on the market’s resilience post-Libra scandal and Argentina’s economic prospects.