Argentine bonds were among the biggest gainers in emerging markets after rallying around Economy Minister Sergio Massa as their main candidate, according to ‘bloomberg”.
The option is seen as increasing the prospects for the South American country to usher in a pro-business administration.
But while Massa is seen as a proponent of market-friendly policies, including an eventual IMF deal, it is unclear how quickly he will be able to catalyze change and solve the country’s persistent financial problems.
Money managers are closely watching the October presidential election for clues about how the next government plans to reform an economy plagued by triple-digit inflation, an unstable currency and growing social discontent.
“The odds of a bad outcome are definitely lower. The question is whether this optimism can last,” said Natalia Goroshina, emerging market fixed-income economist at Van Eyck Associates.
Optimism about a market-favorable outcome in the October election increased with left-wing Interior Minister Eduardo de Wado dropping out of the race.
The shift in support for the party is seen as weakening the influence of Vice President Cristina Fernandez de Kirchner, who leads the far-left wing of the coalition.
The Merval Bursa Index added as much as 5.2% in the local currency, extending its gains since the beginning of the year
