Argentina’s Merval Survives 3% Intraday Plunge, Country Risk Hits 598

BYMA / S&P Merval Daily Report  ·  March 4, 2026  ·  Covering March 3 Session

01 Session Data

02 Key Movers

03 Market Commentary

Tuesday’s session was a microcosm of Argentina‘s unique position in the global market: deeply exposed to risk-off sentiment yet anchored by its own reform narrative. The Merval opened at 2,603,094 and immediately slid into a midday low of 2,516,582 — a 3.3% intraday drawdown — as Iran’s Strait of Hormuz closure triggered a global stampede out of emerging market assets. But the index staged a remarkable recovery in the final hours, closing at 2,597,025 (−0.23%), extending the losing streak to five sessions but limiting the damage to a fraction of what global peers suffered.

Energy names were the clear winners. Adcap Grupo Financiero noted that Vista Energy and YPF are fully exposed to higher oil prices without significant hedges, making them direct beneficiaries of Brent’s surge to $81.40. YPF rose 0.5% in pesos locally, while Vista Energy gained 0.7% in USD on the NYSE. Adcap added that YPF could see additional revaluation given its recent Q4 2025 net loss and the lag in price adjustment. On the losing side, Banco Supervielle led ADR declines at −5%, with Grupo Galicia dropping 2.3% in New York — reflecting the global financial sector rout rather than Argentine-specific concerns.

The sovereign bond market told the more concerning story. Globales and Bonares fell 0.6% on average, with the GD35 losing 1% and GD29 down 0.8%. The country risk spread spiked to 598 intraday — its highest since December 12 and perilously close to the psychologically critical 600 threshold — before pulling back to close at 573 (+7 units). The government has struggled for months to break below 550, the level widely seen as necessary for a return to international capital markets. The war now complicates that path further, with U.S. Treasury yields rising 8–10 bps and widening the benchmark spread.

The peso showed remarkable stability relative to the chaos. The mayorista dollar rose just ARS 20 (+1.4%) to 1,415, while the blue gained only ARS 5 (+0.4%) to 1,425 — well within the BCRA’s floating bands (ceiling at 1,613.03 for the session). Cohen Aliados Financieros summarized the session: the Hormuz blockade drove oil higher and reignited inflation fears globally, pushing bond yields up and the dollar stronger, while equities managed to reverse initial losses. The BCRA bought USD 17 million — its smallest daily purchase since January 20 — extending the buying streak to 40 days with nearly USD 2,800 million accumulated in 2026, representing 28% of the annual reserve target. Gross reserves stood at USD 45,673 million.

04 Technical Analysis

The Merval continues to trade well below the Ichimoku Cloud, confirming the bearish medium-term structure in place since mid-February. The close at 2,597,025 sits far beneath the Tenkan-sen (2,700,776), Kijun-sen (2,742,705), and both Senkou spans (A: 2,803,659 / B: 2,860,072). The cloud top at approximately 2,906,542 represents a distant resistance target — 12% above current levels — signaling a deep correction from the January 28 all-time high of 3,296,502.

The MACD picture is deeply negative. The MACD line sits at −29,271 with the signal at −74,256, producing a histogram of −103,527. All three components are below zero and the histogram remains firmly red, indicating sustained downside momentum with no sign of a reversal. The spread between the MACD and signal lines, however, has begun to narrow slightly, which could foreshadow a bullish crossover if the recovery from Tuesday’s lows gains traction.

The RSI has dropped to 38.42 (fast) with the slow signal at 31.27, placing the index near oversold territory for the first time since September 2025. Tuesday’s long lower wick — the close recovered over 80,000 points from the session low — is constructive, suggesting buying interest near the 2,500,000 zone. The Bollinger Band lower band at 2,451,901 was not violated, and the midline at approximately 2,561,694 sits just below the close, making this area a pivotal level.

05 Forward Look

Country Risk and Market Access:

The 598 intraday spike is a warning shot. The government needs country risk below 550 to realistically return to international capital markets, and the war has pushed that target further away. The successful Bonar 29 (AO27) issuance, designed to raise USD 2 billion for the USD 4.2 billion July debt payment, was a bright spot — but sustained risk above 575 erodes investor confidence in the refinancing strategy. If the conflict escalates and U.S. Treasury yields keep rising, the spread compression story that defined 2025 is over.

Vaca Muerta and Oil Windfall:

Higher oil is a genuine tailwind for Argentina. Vista Energy and YPF — both unhedged — are direct beneficiaries, and Vaca Muerta’s growing export capacity means the country captures more of the upside than in previous oil shocks. However, higher energy prices also complicate the inflation picture domestically, especially with tax revenue already falling 9.6% year-on-year for the seventh consecutive month, highlighting the weakness in domestic consumption.

Milei’s Reform Agenda:

Max Capital highlighted that each ministry has prepared ten reform packages, with one to be sent to Congress monthly — approximately 90 initiatives total, including a Civil Code reform, tax reform, electoral reform, education reform, and further deregulation. The recently approved labor reform, Fiscal Innocence Law, and budget provide momentum. This structural reform pipeline is what differentiates Argentina from other EM selloffs — the Merval’s 21% correction from its ATH is substantial, but the secular bull case built on deregulation, Vaca Muerta, and fiscal discipline remains intact if the government can execute.

Verdict

The Merval’s intraday recovery from −3.3% to close at −0.23% is the session’s most notable feature — evidence of real buying interest in the 2,500,000 zone and a market that, despite five consecutive losses, is not in free fall. The long lower wick on the daily candle is the first constructive price action signal in weeks.

But the technical damage is severe. The index trades 12% below the cloud, RSI is approaching oversold territory at 38/31, and the MACD remains deeply negative. The country risk spike to 598 — flirting with 600 — is the fundamental concern, threatening the debt refinancing strategy that underpins the entire macro narrative. The peso’s relative stability within the bands is reassuring but could face pressure if the BCRA’s daily purchase volumes continue to shrink.

Bias: BEARISH — maintained. Below the cloud with deteriorating MACD and country risk rising. The intraday recovery and oil tailwind offer potential catalysts, but a sustained close above 2,742,705 (Kijun-sen) is needed to shift the bias. Below 2,451,901 (lower BB) targets the October 2025 lows near 2,200,000.

This report is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. All data sourced from BYMA, TradingView, Infobae, Ambito, Bloomberg Linea, JP Morgan, BCRA, Cohen Aliados Financieros, Adcap Grupo Financiero, Max Capital. Chart: TradingView (riotimesonline). Report by The Rio Times. Verify all figures independently before making investment decisions.