By Walter Bianchi
BUENOS AIRES (Reuters) -Argentina’s peso weakened marginally on Monday while stocks edged up and bond prices rose in anticipation of news of financial aid from the U.S. Treasury and as political tensions in Argentina escalate before the country’s midterm elections later this month.
International dollar bonds rose between 0.7 and 2.5 cents each across maturities, continuing the volatile trend of the past few weeks, and remain far from historic highs set in January and revisited in late June.
Sovereign bonds in the local market rose an average of 1.2%, driven by portfolio restructuring in the face of speculative buying, traders said.
The interbank peso fell 0.35% to 1,429.5 per dollar and the S&P Merval stock index ticked up 0.3%.
Economy Minister Luis Caputo has been in Washington for several days, according to his office, to negotiate with U.S. Treasury Secretary Scott Bessent a multimillion-dollar currency swap to boost investor confidence.
So far, no developments have been announced and it is unclear whether he has met with Bessent or with International Monetary Fund officials.
U.S. President Donald Trump will also meet with Milei on October 14, during the week that the World Bank and the IMF will convene in Washington.
“The market is waiting for more than just signals; more details about the loan or program are needed to calm tensions and guarantee the financial program regardless of the election outcome,” said economist Roberto Geretto of AdCap, a consulting group in Buenos Aires.
On Sunday, the leading candidate on the midterms ticket for Milei’s party in the Buenos Aires province resigned, after facing public scrutiny for ties to a businessman under investigation in the U.S. for drug trafficking.
Milei has been in political hot water for weeks, with his popularity falling amid a corruption scandal that ensnared his sister and confidante, and a public tired of the government’s austerity measures.
In another setback last week, Argentina’s opposition-controlled Senate voted to override Milei’s vetoes of bills boosting funding for public universities and pediatric healthcare.
(Report by Walter Bianchi; Edited by Hernán Nessi, Maximilian Heath, Rodrigo Campos and Mark Porter)
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