Merval Slides 1.5% as Iran War Tests Argentina’s Rally

March 3, 2026 • Buenos Aires Morning Briefing • Covering the March 2 Session

The Big Three

Market Snapshot

Equities

The S&P Merval fell 1.48% to 2,603,094 on Monday, extending a correction that has now taken the index 21% below its all-time high of 3,296,502 set on January 28. The session produced a wide 4.2% range (2,598,372 to 2,707,246) as the market swung between geopolitical panic and dip-buying on oil-linked names — a pattern that mirrors the “from greater to lesser” reaction Infobae described across global markets.

The sector divergence was stark. Banks led the decline: Supervielle collapsed 7.2%, Banco Francés shed 5.7%, and Grupo Galicia fell 2.8% as financial stocks bore the brunt of risk-off positioning. These names are the most rate-sensitive in the index and suffer disproportionately when global volatility spikes, as higher UST yields compress the carry trade that has supported Argentine bank valuations.

Energy names told a different story: YPF rose 0.9% in Buenos Aires and its ADR was mixed, while Pampa Energía gained 1% as WTI surged 6% to $71.02. Vista Energy’s ADR jumped 2.1% in New York, and Mercado Libre added 1.1%. The energy sector’s resilience reflects Argentina’s growing role as a net energy exporter via Vaca Muerta — higher crude prices are unambiguously positive for the sector’s cash flow generation, with the sector trading at under 6x EV/EBITDA NTM.

The Merval has been in “lateral consolidation mode” for over two months following the explosive post-legislative-election rally in late 2025. The index gained over 900% from the 2020 lows to January 2026 highs, making some mean reversion inevitable. From a fundamental perspective, the macro picture remains supportive — GDP grew 4.4% in 2025 with a 2% statistical carryover into 2026, and FMyA projects 4.2% growth this year. But the challenge, as GMA Capital noted, has shifted “from stabilizing to consolidating genuine growth.”

Currency

In a remarkable display of domestic fundamentals overriding global turmoil, the peso actually strengthened on Monday. The wholesale dollar fell $2 to $1,395 after opening sharply higher at $1,410 on the Iran shock. Nicolás Merino of ABC Mercado de Cambios described the session: the dollar opened well above Friday’s close, sellers appeared immediately, and by midday the bid had retreated to $1,391.50 before a slight recovery into the close.

The BCRA purchased USD 70 million, representing 19.1% of total market volume of USD 366.1 million. This marked the 40th consecutive session of net purchases, bringing Phase 4 total acquisitions to USD 2,783 million — already 28% of the low-end annual target of USD 10 billion. Gross reserves surged USD 957 million to USD 46,517 million, though this was largely a technical rebound from month-end deposit movements. The bandas ceiling for March 2 stood at $1,611.54, leaving the exchange rate 15.6% below the upper bound.

Dollar futures fell 0.7% to 0.9% across the curve, with the March contract settling at $1,423 — well inside the $1,653.59 bandas ceiling for month-end. Total futures volume was a significant USD 990.9 million, suggesting hedging activity but not panic positioning.

The riesgo país had a volatile session — spiking to 590 bps intraday before settling at 567, down 9 from Friday’s close. The compression was largely mechanical, driven by the 8–10 bps rise in UST yields (the spread measures relative to Treasuries, so when UST yields rise sharply while Argentine bond yields hold, the spread narrows). The index remains above its recent trough of 474 bps touched in late January, and analysts warn that sustained levels above 550 bps signal Argentina still lacks reliable access to international debt markets for refinancing.

Technical Analysis

Merval Daily Chart — S&P MERVAL Index (1D, BYMA)

Monday’s candle printed a red body that closed near the session low, with a small upper wick showing failed attempts to reclaim the opening gap. The index continues to trade below the Ichimoku cloud, confirming the bearish medium-term bias that has prevailed since the breakdown from January highs.

OHLC: O 2,642,105 • H 2,707,246 • L 2,598,372 • C 2,603,094

RSI (14/14): 39.28 / 31.52 — both readings are approaching oversold territory, with the slower line at 31.52 barely above the 30 threshold. This is the most bearish RSI configuration since the pre-election selloff in late 2025. A breach below 30 on both lines would generate a classic oversold signal, though in strongly trending markets RSI can remain suppressed for extended periods.

MACD (12,26,9): −28,574 / −66,938 / −95,512 — all three MACD components are deeply negative, confirming strong downward momentum. The MACD line (−28,574) sits above the signal line (−66,938), and the histogram (−95,512) shows the magnitude of the bearish impulse, though it has begun to narrow slightly — a prerequisite for any eventual bullish crossover. This is not a market ready to turn.

Ichimoku Cloud: Price trades well below the cloud (Kumo), confirming a bearish trend. The blue 200-SMA equivalent trendline visible on the chart is rising toward the 2,582,611 level, which served as near-term support on Monday’s low. The cloud’s leading span is widening to the upside, creating a growing distance between price and potential resistance.

Volume: The volume histogram shows declining trading activity relative to the November surge that accompanied the post-election rally. This is typical of a corrective phase where selling pressure is persistent but not panicky — more a drip of distribution than a capitulation flush.

Key Levels

Global Context

The session was shaped by Operation Epic Fury — the joint U.S.–Israeli strike that killed Iranian Supreme Leader Khamenei and triggered Iran’s closure of the Strait of Hormuz, disrupting an estimated 20% of global petroleum and LNG flows. Oil prices surged violently: Brent +9.1% to $79.45 (intraday high $82.37), WTI +6% to $71.02. Gold hit $5,408/oz on safe-haven demand. The DXY surged to 98.56.

Wall Street staged an intraday reversal: the S&P 500 recovered from −1.2% to close flat at 6,881.62, with defense stocks surging (Northrop Grumman +6%, Palantir +5.8%) while airlines and cruise lines cratered (Carnival −10.6%, American Airlines −4.9%). UST 10-year yields rose to 4.02% from 3.94%. However, overnight futures pointed sharply lower for Tuesday — S&P −0.9%, Nasdaq −1.2% — as the conflict intensified.

For Argentina, the oil shock is a net positive for the real economy: Vaca Muerta’s shale production benefits directly from sustained crude above $70, and the government’s energy export strategy — with 32 RIGI projects worth over 60,000 jobs approved — becomes more attractive. But the financial transmission mechanism works in reverse: higher global risk aversion tightens EM financing conditions, pushes up riesgo país, and makes the Tesoro’s USD 14 billion in remaining 2026 debt payments more expensive to refinance. This oil-positive/finance-negative duality is the defining tension for Argentine assets in the weeks ahead.

Looking Ahead

Tuesday, March 3: Markets digest Milei’s Asamblea Legislativa speech and ongoing Iran conflict developments. Encuesta Banxico (Mexico) may provide read-through for EM sentiment. Watch for BCRA FX purchase data and any Tesoro bond issuance announcements.

Friday, March 6: U.S. Non-Farm Payrolls. A strong print reinforces the Fed pause, supports the dollar, and adds pressure to EM currencies and risk assets. CME probabilities for a July Fed cut currently at 45%.

March 7: Milei travels to Miami for a Latin American presidents’ summit with Trump — any signals on bilateral trade, investment, or security cooperation could move Argentine assets.

March 9–11: Argentina Week in New York, the investment roadshow organized by the Argentine Embassy with JP Morgan, Bank of America, and Kaszek. This is the most important near-term catalyst for sovereign credit and equity sentiment. Success in generating concrete investment commitments could compress riesgo país below 500 bps.

Inflation watch: FMyA projects February inflation at 2.7%, with education-driven increases. March is expected at 2.4%. The BCRA is providing liquidity via dollar purchases and LECAP maturities, keeping short-term rates around 2.6% monthly (32% TNA). The inflation-rate spread remains the key variable for peso-denominated carry trades.

Verdict

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