Merval Surges +2.56% to Lead LatAm as Argentina Country Risk Falls

Market Snapshot

Equities

The S&P Merval posted the strongest session in Latin America on Monday, surging 2.56% in pesos to 2,700,255.24 and an even more impressive 3.3% in dollar terms. The TradingView feed recorded an open at 2,632,795, a high of 2,752,371, a low of 2,624,228, and a close at 2,700,255—a solid green candle with a long upper wick suggesting aggressive buying followed by some late-session profit-taking.

The outperformance relative to regional peers was striking: Colombia’s COLCAP gained 2.11%, Brazil rose 1.40%, Mexico added 0.76%, while Chile’s IPSA actually fell 0.6%. Argentina’s stronger move reflects the unique combination of a domestic political premium (Milei’s reform agenda) and the disproportionate benefit of lower oil prices for an economy where Vaca Muerta energy exports are a structural growth driver but where consumer inflation remains the primary concern.

Sovereign bonds were the clearest barometer of improving sentiment. Dollar-denominated bonds rose up to 1.5%, led by the Global GD38 and Bonar AL30 series. Country Risk plunged 28 basis points to 555 bps—its largest single-day decline in weeks—unwinding much of the stress built up during the Iran crisis. Sailing Inversiones noted that Argentine bond dynamics tend to be driven more by domestic factors than by global rate movements, insulating them somewhat from the oil-driven Treasury yield spike.

Currency

All dollar references declined on Monday as risk appetite returned and the BCRA continued intervening. The dollar mayorista fell $16 to ARS 1,400, while financial dollars retreated across the board: MEP dropped $8 to ARS 1,422, the contado con liquidación (CCL) shed $11 to ARS 1,463, and the blue lost $5 to ARS 1,420. The narrowing of the MEP-blue gap to just ARS 2 reflects the improved confidence in the official crawling peg framework.

The BCRA purchased USD 67 million in the official market (Mercado Libre de Cambios), where USD 459 million were traded. Gross reserves rose USD 275 million to $46,043 million. The accumulation is critical as the government prepares for the next round of sovereign debt payments and continues to build the reserve buffer needed for any eventual currency regime change.

Looking at the AO27 licitación, the Treasury is aiming to raise USD 2,000 million in total through multiple placements to cover July maturities. The prior tranche placed USD 250 million at sub-6% rates. F2 Inversiones warned that rate conditions may be tightening, noting that Treasury deposits at the BCRA have already fallen to USD 481 million from USD 532 million after the last settlement. The bond matures after October’s midterm elections but under Milei’s presidency, adding a political dimension to its risk profile.

Technical Analysis & Chart

The daily chart shows the Merval posted a strong green candle, opening at 2,632,795 and pushing to a high of 2,752,371 before closing at 2,700,255. The candle reclaimed the 2,671,130 support level convincingly, though the long upper shadow from the 2,752K high to the 2,700K close indicates some resistance in the 2,750K–2,776K zone.

Momentum indicators remain bearish but are showing early signs of inflection. The RSI reads 42.73 with its signal at 36.58—both below 50 and in the lower half of the range, but the main line is turning higher from oversold territory. The MACD histogram at −2,721 is narrowing toward zero from the deeply negative −96,769 signal and −99,490 trigger, suggesting the selling wave is exhausting itself even though a full bullish crossover has not yet materialized.

The index sits below all major short-term moving averages, with key resistance at the 2,762,010 and 2,776,328 levels (cluster of the 20- and 50-day SMAs). The 200-day SMA is far below at approximately 2,460,278, confirming the secular uptrend remains intact. The Bollinger Bands show the index bouncing from near the lower band after the correction from the January highs near 3,048,710.

The corrective move from the 3,048,710 area to the 2,624,228 low represents a roughly 14% drawdown in pesos, consistent with a healthy pullback within a structural bull market. Monday’s bounce needs follow-through above 2,776,000 to confirm a trend reversal; otherwise the index may consolidate in the 2,634,000–2,762,000 range.

Key Levels

Global Context

Global markets experienced a historic oil price reversal on Monday. Brent crude underwent a roughly $30 swing in less than 48 hours, peaking near $120 before crashing to settle at $87.80—the largest single-day percentage drop since 2022. The catalyst was a series of de-escalatory signals from Washington: Trump called the Iran war “very complete,” Energy Secretary Wright falsely claimed (in a deleted post) that the Navy had escorted a tanker through the Strait of Hormuz, and the IEA called an emergency meeting on strategic stockpile releases.

Wall Street finished mixed. The S&P 500 slipped 0.21% to 6,781.48 after recovering from a near-900-point Dow intraday plunge. The VIX eased to 24.93. Gold surged 2.44% to $5,228.40 on dollar weakness and safe-haven flows, while silver jumped 6.25%. JPMorgan’s trading desk warned that a 10% S&P 500 correction remains likely if oil sustains triple digits.

For Argentina, the oil crash has a distinctly positive flavor. Unlike net oil importers, Argentina’s Vaca Muerta shale basin makes it a growing energy exporter. Lower global oil prices ease imported inflation pressure while Vaca Muerta production economics remain viable above $60 Brent. The combination of de-escalating war fears, falling financial dollars, and the BCRA’s continued reserve accumulation created the perfect backdrop for Monday’s outsized rally. However, Infobae cautioned that the rally was driven by “short anesthesia”—markets heard what they wanted to hear, but the underlying Middle East risks remain unresolved, and normalizing oil supply could take months even if peace arrives tomorrow.

Looking Ahead

Today (March 11): U.S. CPI data for February is the marquee global event. A hot print could reverse the nascent rate-cut optimism and pressure emerging-market assets, including Argentine bonds. The AO27 licitación results will reveal investor appetite for Argentine sovereign risk in the current volatile environment.

This week: U.S. jobless claims (March 12), GDP second estimate and UMich inflation expectations (March 13). Locally, the BCRA’s reserve trajectory and the evolution of the brecha cambiaria (gap between official and parallel rates) remain the key domestic indicators to monitor.

March 18: The Federal Reserve rate decision. While rates are expected to hold at 3.50–3.75%, any hawkish shift in language would pressure Argentine bonds and widen the country risk spread. The oil-driven inflation scare pushed one-year U.S. inflation swaps from 2.20% to 2.63%, complicating the Fed’s messaging.

Political calendar: Argentina’s midterm elections in October remain the dominant structural variable for asset prices. The Milei government’s fiscal consolidation and Vaca Muerta development agenda continue to attract investor attention, but the AO27 bond’s maturity after the election adds a layer of political risk that markets are actively pricing. The next BCRA rate decision and inflation data will be critical for the peso carry trade thesis.

Verdict

Argentina was the clear winner of Monday’s Latin American session. The Merval’s 3.3% gain in dollar terms outstripped every peer, and the 28-bps collapse in country risk to 555 bps signals genuine risk appetite returning—not just a peso rebound. The BCRA’s USD 67 million purchase and reserve buildup to $46,043 million adds to the constructive narrative, while the convergence of MEP and blue at virtual parity (ARS 1,422 vs. ARS 1,420) suggests the crawling peg is maintaining credibility.

The caution comes from the nature of the catalyst. Infobae’s framing of Monday as “short anesthesia” is apt: the White House disavowed the tanker escort claim within hours, and analysts note that even if peace arrives, normalizing Strait of Hormuz supply chains will take months. Insurers won’t back vessels until the route is proven safe, and shuttered production across the Gulf takes time to restart. The oil floor has structurally moved higher.

Bias: Cautiously bullish. Argentina’s domestic reform story provides a unique buffer against global headwinds. The Merval needs to clear the 2,776,000 SMA cluster to confirm the correction is over; below 2,634,000, the sell-off resumes. The AO27 licitación and U.S. CPI data today are the immediate catalysts. Country Risk at 555 bps has room to compress further if oil stays below $100 and the political calendar remains favorable.

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