Merval Argentina Up 4.6% on Iran Peace Rally

01 Market Snapshot

02 Equities

The Merval Argentina today surged +4.61% to 2,997,780.34, its strongest single-session advance in weeks, as the global Iran de-escalation rally overwhelmed lingering concerns about Argentina’s economic slowdown. The S&P 500 gained 2.91%, the Dow jumped 1,125 points, and the Nasdaq surged 3.83% — all posting their best sessions since May. This is part of The Rio Times’ daily coverage of the Argentina stock market Merval today and Latin American financial markets.

The catalyst was a Wall Street Journal report that President Trump told aides he was willing to end military operations in Iran even without the Strait of Hormuz fully reopening, followed by unconfirmed reports that Iranian President Pezeshkian was open to ending the conflict with security guarantees. The Merval opened at 2,865,753 and climbed without retracement to briefly breach the 3-million mark at 3,003,104.67 before a minimal pullback. The index has now gained over 15% for the month, erasing the March selloff that was triggered by concerns over the INDEC statistics controversy and the Merval’s 2.73% single-session drop on March 12.

Banking heavyweights likely led the advance, consistent with recent sessions. As noted in our previous Argentina market coverage, Grupo Financiero Galicia, Banco Macro, and YPF remain the index’s key drivers. YPF in particular benefits from oil above $100, given its Vaca Muerta production expansion.

03 Monetary Policy: Rate Collapse & Reserve Accumulation

Argentina’s benchmark short-term interest rates have plunged to approximately 20% from 50% at year-end and over 100% in October 2025. The decline is the direct result of the BCRA’s aggressive dollar purchases — US$2.8 billion since January — which flood the system with pesos, expand the monetary base, and mechanically push rates lower. BCRA Governor Santiago Bausili told investors at Argentina Week in New York that the bank will continue buying reserves “while people demand pesos.”

The rate collapse is deliberate: the Milei administration is prioritizing growth and reserve accumulation over inflation control. With annual inflation at roughly 31% and monthly readings stubbornly near 2.9% (January), rates below inflation erode the incentive to hold pesos and risk a renewed depreciation cycle. Map Latam director Maria Minatta noted that economic activity “is now at the top of people’s concerns,” signaling the government’s pivot from pure disinflation to growth normalization.

The crawling band framework — indexed to lagged inflation since January 1, 2026 — has allowed the peso to appreciate roughly 7% since the October mid-term elections. The BCRA targets building the monetary base from 4.2% to 4.8% of GDP by year-end, consistent with reserve purchases of up to US$10 billion. However, PIIE warned that the lagged indexation introduces inflationary inertia and creates a “narrower path to price stability.”

04 Fiscal & Economic Outlook

Milei’s fiscal anchor — the primary surplus that has been his signature achievement — is showing strain. Tax revenue has underperformed inflation for seven consecutive months, with a 10% real decline in February according to the Argentine Institute of Fiscal Analysis. Lower sales tax collections and weaker social security contributions from rising unemployment account for roughly a third of the revenue shortfall, per Banco Mariva estimates.

The economy is growing unevenly: agriculture, energy, and mining expand while manufacturing, construction, tourism, and retail stagnate under the weight of a strong real peso and compressed consumer spending. Unemployment has leapfrogged inflation as Argentines’ primary concern in recent Isonomia Consultores polling. Fitch’s Todd Martinez warned the slowdown “threatens the fiscal anchor,” though Moody’s Jaime Reusche suggested tolerating a small deficit could be rational if it avoids social or political shocks. The 2026 budget targets a primary surplus of 1.5% of GDP, but analysts increasingly question whether this is achievable.

External debt maturities exceeding US$19 billion in 2026 remain the structural overhang. The government’s ability to refinance in international markets depends on driving country risk below 600 basis points — a threshold it has struggled to breach. As analyzed in the latest Latin American Pulse, Argentina’s debt trajectory is the key variable separating a sustained rally from a reversal.

05 Political Context

Milei’s mid-term election victory in October 2025 gave his party the largest bloc in the lower house, securing the political capital to sustain vetoes and advance reforms. A labor reform bill is being negotiated with governors and unions early in 2026. However, the INDEC statistics controversy in February — when the government reversed plans to update the obsolete 2004 CPI basket — rattled investor confidence, triggered the national statistics chief’s resignation, and sent the Merval tumbling.

The government’s credibility rests on the inflation narrative: annual CPI has dropped from 211% to 31%, but monthly readings have accelerated for five consecutive months through January. Critics argue the outdated CPI basket underestimates real inflation, particularly given surging utility costs from subsidy cuts. The next presidential election is in October 2027 — Milei needs visible economic improvement in labor-intensive sectors to maintain popular support as austerity fatigue accumulates.

06 Technical Analysis — Merval Daily

Monday’s session produced a powerful bullish candle, opening at 2,865,753 — near the session low — and surging to an intraday high of 3,003,104.67 before closing at 2,997,780.34. The candle has virtually no lower shadow, indicating buying conviction from the open, and the close near the high signals momentum continuation. The breach of the psychological 3-million level, even if briefly, is technically significant.

The MACD reads 40,068.31 / 14,956.86 / −25,111.45. The histogram remains negative but is narrowing sharply, and the MACD line is well above the signal line — a bullish crossover appears imminent. RSI stands at 65.20 on the weekly and 49.41 on the daily. The weekly RSI approaching 65 is constructive but not yet overbought, while the daily at 49.41 sits right at the midline with significant room to run. The index has reclaimed territory above the 200-day moving average zone near 2,800,000 and is pressing against the Ichimoku cloud from below.

07 Key Levels

08 Global Context

Wall Street surged on Iran peace hopes — Dow +2.49% (+1,125 pts to 46,341), S&P 500 +2.91% (6,528), Nasdaq +3.83% — all posting their best day since May. The moves came after Trump told aides he was willing to end military hostilities even if the Strait of Hormuz remains shut, plus unconfirmed reports Iran’s president was open to ending the war with guarantees.

Brent May futures settled at $118.35 — highest close since June 2022 — capping a record +60% monthly gain. WTI fell $1.50 to $101.38. The May-June Brent spread inversion suggests de-escalation premium decay. The S&P 500 still closed March down 5.1% — worst month since last March — and Q1 down 7.33%, the worst since June 2022. For Argentina, Brent above $100 is a double-edged sword: it benefits YPF and Vaca Muerta production but raises imported energy costs and complicates the inflation trajectory.

09 Looking Ahead

The BCRA’s rate-collapse experiment is the defining trade for Argentine assets. If reserve accumulation continues without triggering a renewed peso slide, the government can sustain its dual objective of growth normalization and disinflation. If rates below inflation spark dollar demand and widen the exchange-rate gap, the virtuous cycle reverses quickly. The monthly CPI print for March — expected in mid-April — will test whether the rate cut has passed through to prices.

External debt payments of approximately US$19 billion across 2026 require market access at country risk below 600 bps. The FOMC meets April 28–29, where oil-driven inflation complicates the Fed’s rate path — Goldman has pushed its first-cut call to September. Higher-for-longer US rates tighten global dollar liquidity, which directly pressures Argentina’s refinancing calculus. As covered in our recent analysis of Milei’s economic trajectory, the next three months will determine whether Argentina’s reform story remains intact or faces a credibility test.