Buenos Aires, October 27, 2025 — Argentina’s financial markets surged on Monday following a sweeping midterm election victory for President Javier Milei’s La Libertad Avanza (LLA) party, signaling renewed investor confidence in the libertarian leader’s aggressive economic reform agenda.
The rally saw international bonds soar between 9% and 13%, local stocks jump more than 20%, and the peso strengthen 6% against the US dollar — a sharp reversal from recent lows. Analysts said the decisive win solidified Milei’s mandate to push forward structural fiscal and monetary reforms, while maintaining crucial financial backing from the United States.
Milei’s Victory Strengthens Reform Path and US Support
Official results confirmed that LLA secured 41.5% of the vote in Buenos Aires province, traditionally a Peronist stronghold, compared to 40.8% for the opposition coalition. Nationally, Milei’s party captured over 40% of the vote, far exceeding expectations and expanding its legislative influence.
The victory follows Washington’s pledge of a $40 billion financial package — split between a $20 billion central bank swap line and a potential $20 billion loan facility — contingent on Milei’s continued fiscal discipline and liberalization measures.
“His victory was so much larger than expected,” said Thierry Larose, portfolio manager at Vontobel Asset Management. “Previously, Milei was in a state of survival; now, he’s in a powerful position to form alliances and advance reforms once thought politically impossible.”
Investors Respond With Enthusiasm
Argentina’s 2038 international bonds climbed 13 cents to 73 cents on the dollar, nearing record highs. US-listed Argentine equities surged, led by financial firms rising up to 50%, while the Global X MSCI Argentina ETF jumped 20% after weeks of decline.
The peso, which had weakened over 25% since April amid easing foreign exchange controls, rallied to 1,320 per US dollar before settling near 1,410, still up nearly 6% on the day.
“The government has breathing room now and can take the next steps from a position of strength,” said Matthew Graves, emerging markets debt manager at PPM America. “We expect a gradual move toward a managed-float FX regime to help rebuild foreign reserves.”
Reform Momentum and Investor Confidence Grow
For Milei, the legislative gains are critical. His free-market, austerity-driven reforms — including deep spending cuts, privatizations, and deregulation measures — have begun to tame inflation after years of economic instability. The victory gives him more leverage to negotiate reforms across Congress and ease investor fears of political gridlock.
Christine Reed, of Ninety One Asset Management, noted that Milei’s moderate and conciliatory victory speech reassured markets.
“He signaled a willingness to cooperate with non-LLA legislators, which is crucial for passing complex economic bills,” she said.
Market watchers also view the results as a turning point for foreign direct investment. “The midterms extend Argentina’s reform horizon and reduce electoral risk, offering a more stable environment for global investors,” explained Graham Stock, senior strategist at RBC BlueBay Asset Management.
Peso Strength Could Boost Reserves
Analysts predict that a stronger peso and renewed investor optimism could trigger a “virtuous cycle” — encouraging locals to sell US dollars, helping the central bank replenish reserves. Carmen Altenkirch of Aviva Investors believes this dynamic could “naturally strengthen the currency” without heavy intervention.
Still, experts caution that challenges remain, including low reserves, fragile debt sustainability, and potential social pushback against austerity. Yet, for now, the Milei government appears to have won breathing space — and market credibility.
“They need to capitalize on the peso’s strength to rebuild reserves while confidence is high,” Stock added.
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