Merval Snaps February Losing Streak as Reform Vote and Dollar Collapse Fuel Rally

The S&P Merval closed at 2,873,248 points on Friday, advancing 1.2% in pesos and 1.7% in dollar terms (CCL-adjusted) to approximately US$1,996. The session broke a dismal February streak that had seen the index shed 10% from its late-January peaks, driven by global tech rotation and Middle East-related risk aversion. This is part of The Rio Times’ daily coverage of Argentine markets and Latin American financial news.

Real estate and exchange operator names led the charge. IRSA soared 8.7% on the local board (4.5% in ADR terms) and BYMA surged 8.2%, both benefiting from the labor reform tailwind and broader domestic optimism. Grupo Financiero Galicia gained 4.7% locally (+4.2% in New York), while Cresud added 4.3% (+4.6% some sources cite). In ADR markets, BBVA Argentina rose 3.6%.

Despite the Friday rebound, the Merval remains down 5.8% in pesos and 0.3% in USD year-to-date, underscoring the damage inflicted earlier this month when global risk-off sentiment hammered high-beta emerging market equities. Sovereign bonds in dollars (Bonares and Globales) advanced approximately 0.7% on the session.

The dollar collapsed across all Argentine market segments on Friday, amplifying a trend that has defined early 2026. The mayorista rate fell ARS 15.01 (−1.08%) to ARS 1,375.97, its lowest since October 14, 2025. In February alone, the official rate has dropped ARS 71 (−4.9%), and year-to-date the decline stands at ARS 79 (−5.4%).

The dólar blue shed ARS 10 (−0.7%) to ARS 1,430, its lowest since early December. Year-to-date, the informal rate is down ARS 100 or 6.5%. Financial dollars followed suit: the MEP closed at ARS 1,402.08 (−0.5%) and the CCL at ARS 1,439.75 (−0.5%). The BNA retail rate ended at ARS 1,395, down ARS 15.

The BCRA purchased USD 167 million on Friday, extending its buying streak to 33 consecutive sessions and lifting 2026 cumulative purchases to USD 2,412 million — roughly 24% of the annual reserve target. Gross reserves jumped an extraordinary USD 1,348 million to USD 46,261 million, the highest since August 2021. The surge reflects not only BCRA purchases but also currency revaluation (gold), and a USD 800 million transfer from Santa Fe province through Banco Santander in New York.

Economist Fernando Marull (FMyA) attributed the sustained dollar decline to three factors: agro-sector liquidations averaging USD 80 million per day, nearly USD 5 billion in corporate and provincial debt issuance scheduled for H1 2026, and elevated peso interest rates (~3% monthly) making carry trades highly attractive. Dollar futures fell across all tenors, with the February contract dropping ARS 14.50 (−1%) to ARS 1,386.50.

The Merval closed at 2,873,248 (TradingView BYMA feed shows 2,873,248.320), posting a solid bullish candle after several weeks of corrective price action from the late-January peak near 3,003,659 (upper Bollinger Band area). The index is attempting to stabilize above a cluster of moving averages around the 2,870,000–2,900,000 zone.

RSI (14): 44.09 / 43.01 — squarely in neutral territory, neither oversold nor overbought. This suggests downside exhaustion from the February selloff but insufficient momentum for a confirmed reversal. A push above 50 would signal a shift to bullish momentum.

MACD: Histogram at −27,288, with the MACD line (−57,805) still below the signal line (−30,517). Both lines remain firmly below zero, confirming the medium-term bearish bias is intact. However, the histogram is contracting (becoming less negative), hinting at a potential bullish crossover in coming sessions if buying pressure continues.

Argentine assets benefited from a double tailwind on Friday: domestic reform momentum and global risk-on sentiment following the U.S. Supreme Court’s 6–3 ruling striking down Trump’s IEEPA-based tariffs as unconstitutional. The ruling was interpreted as a structural curb on executive protectionism, initially boosting Wall Street and emerging market currencies. The S&P 500 gained 0.69%, the Nasdaq 0.90%, and the Dow 0.47%.

However, Trump immediately announced replacement tariffs of 10% on all imports under Section 122 of the Trade Act of 1974, capping the euphoria. For Argentina, the tariff picture is less directly relevant than for export-heavy neighbors like Mexico and Chile, but the broader macro signal matters: a weaker DXY (97.79, −0.01%) and elevated gold ($5,108/oz, +2.21%) are constructive for EM capital flows and for Argentina’s gold-heavy reserve base.

U.S. Q4 GDP printed at 1.4% annualized, well below the 2.5% consensus, dragged by the federal government shutdown. Core PCE held at 3.0% YoY, reinforcing the Fed’s cautious stance. The UST 10Y edged up 2 bps to 4.08%, keeping Argentine sovereign bond spreads stable. Oil prices were volatile amid Iran tensions: WTI at ~$66.26 (−0.06%), Brent near $71.63.

The Milei government secured approval of its labor reform bill (“Modernización Laboral”) in the Cámara de Diputados with 135 votes in favor and 115 against. The bill passed with support from LLA’s 94 deputies, the PRO, UCR, and several smaller parties. The only modification from the original text was the removal of Article 44, which proposed reducing remuneration during non-work-related illness.

The reform aims to reduce labor litigation costs — one of the most cited barriers to formal hiring — and introduces incentives for formal employment registration. It now returns to the Senado, where the government plans to push for a session on February 27 for final ratification. Ignacio Morales of Wise Capital noted that the litigation reduction should “contribute to the formalization of the labor market.”

On the monetary front, the BCRA overnight repo rate stands at 29%. January CPI printed at 2.9% (the fifth consecutive acceleration, highest since March 2025), driven by food and beverages (+4.7%). Year-on-year inflation stands at 32.4%. The government maintains its monetary tightening stance: the base contracted nearly ARS 800 billion since year-end as the Treasury absorbs pesos via above-trend debt issuance, offsetting BCRA reserve purchases. Milei has publicly stated that monthly inflation should fall below 1% by August.

Senado vote (Feb 27 target): Final ratification of the labor reform is the most significant near-term catalyst. Market expectation is for passage, but any procedural delays would pause the domestic momentum.

U.S. tariff clarity: The transition from struck-down IEEPA tariffs to Section 122 replacements will shape global EM risk appetite. Argentina’s direct trade exposure is limited, but second-order effects through commodity prices and DXY remain important.

Trade surplus momentum: January’s trade surplus of USD 1,987 million (12x the year-ago figure) — the largest nominal January surplus in the 21st century — underscores the FX supply dynamics supporting the peso. April’s grain harvest season should amplify this.

BCRA reserves: With the central bank already 24% of the way to its annual target in under two months, and gold at record highs boosting reserve valuations, the question shifts from “can they accumulate?” to “will they open international debt markets?” (Minister Caputo says no, for now.)

Key Facts

— Cautiously constructive. The macro picture is better than the Merval price suggests.

— Friday’s session was the Merval’s best in two weeks, breaking a pattern of relentless selling that had more to do with global tech rotation and Iran jitters than Argentine fundamentals. The trifecta of reform progress, a collapsing dollar, and record reserve levels provides a genuine floor beneath equity valuations — but technicals are not yet confirming a reversal.

— RSI at 44 is neutral, the MACD remains below zero, and the index needs to reclaim the 2,900,000–2,950,000 zone to signal a sustained recovery. The carry trade (peso rates ~3%/month vs. a falling dollar) continues to funnel capital into peso-denominated assets and support bonds, but equities need a fresh catalyst to attract risk capital beyond reform headlines.

— The wild card remains January’s 2.9% inflation print — the fifth consecutive acceleration. If February’s number (due March 10) does not inflect lower, the market will start questioning whether the BCRA’s monetary tightening is sufficient, and the carry-trade thesis could face a credibility test. For now, the balance of risks tilts mildly positive, with the Senado vote as the next binary event.

Key Facts

— Deep Dive

— For the complete picture, read our in-depth guide: Latin America Stock Markets 2026: Ibovespa, Merval, COLCAP, IPSA and IPC Guide

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