The parliamentary elections at the end of October ensured a good financial climate in Argentina. With political uncertainty resolved, the government defended the foreign exchange band system, stocks and bonds rallied while peso exchange rates fell – a combination of positive news that saw companies move from “severe stress” to a “comfort zone” from one month to the next.
The data comes from The Financial Conditions Index recovered 40 points in November to reach 53.2 units. They explained this, prepared by the Argentine Institute of Financial Executives (IAEF), which prepared the report together with the consulting firm Econviews Local conditions “flyed” by 42 points and it was the largest monthly swing since May. according to the agreement with the International Monetary Fund (IMF).
“From severe stress in October to a comfort zone of 26.6 units by local standards, driven by the financial rally and fall in interest rates following the ruling party’s victory in the October 26 general election.” Instead, external conditions fell again, “two points this month, although they are still in the comfort zone at also 26.6 units,” the report emphasized.
There are several components that make up this index and that explain the good investor sentiment. Since the indicator takes into account monthly averages (and not end-to-end travel), the Buenos Aires stock market price rose from $1,388 to $1,973, an increase of 42% compared to October. This variation was a record for the last 20 years, However, they added that it is 12% short of returning to the highs seen in January this year.
“The reduction in interest rates has provided oxygen to the market. The two best performing local variables in November were short liquidity (as measured by). spread between badlar and call rates) and the badlar interest rate, which fell on average from 46% to 32% of the annual nominal rate, although it is still several points above the 28% in February. As seasonal demand for money to pay premiums and other reasons increases in December, there is scope for interest rates to fall further. The risk is that the dollar wakes up in January/February, when the demand for money is reversed due to vacations and foreign trips,” they analyzed from the IAEF.
Another positive news they highlighted is this The Ministry of Economic Affairs announced that it would again issue debt in dollars. Call for tenders taking place this Wednesday. With a hard currency bond due in November 2029, the government said it is seeking $1 billion to cover the January maturities of the Bonares and Globales. This exact test of the FX market comes after country risk fell to 650 basis points in November, although it is still around 400 points in the region.
In any case, the local financial climate was not the only point analyzed. While financial assets tended to rise in Argentina, the sub-index fell again worldwide, losing two points to 26.6 units compared to October. It was the worst value since the tariff shock in April and Maydue to the volatility of stocks and emerging market currencies.
“Nvidia says there is no bubble. The S&P 500 experienced days of fear before the chipmaker reported its third-quarter results, with one Instructions optimistic. The stock market gained 17% in 2025 but was flat in November. The VIX index, which measures stock volatility, ended in a moderate stress zone. “After three years of rallying, the market is beginning to doubt whether the artificial intelligence giants are overvalued in terms of their true ability to generate revenue,” he concluded.
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