Markets on alert: Argentine stocks and bonds rebound after the post-election collapse, and the IMF backs the band scheme.

Argentine financial markets are trying to recover from the blow the Buenos Aires elections dealt to the ruling party. After the fifth-worst drop in history on the Buenos Aires Stock Exchange on Monday and further losses on Tuesday, local stocks and bonds showed a partial rebound on Wednesday , driven by the relief brought by the International Monetary Fund's public support for the floating exchange rate bands.

The S&P Merval index climbed 4% to 1,800,000 points, with banking stocks leading the gains . Banco Macro climbed 7.2%, Grupo Financiero Galicia advanced 6.4%, and Banco Supervielle 6.7%, after having been the hardest hit at the start of the week. Meanwhile, Argentine ADRs listed in New York followed the trend: Macro rose 8.5%, Galicia 7.3%, and BBVA 6.6% .

In the debt segment, dollar-denominated sovereign bonds (Bonars and Globales) advanced 1.1% on average, following the sharp decline that followed the ruling party's electoral defeat. With this movement, country risk stood at around 1,080 basis points, still close to its highest level in eleven months.

The International Monetary Fund sent a key message to the market, supporting the government's continued use of the exchange rate bands. Within this framework, the official retail dollar remained at $1,435 on Banco Nación's exchange screens, while the wholesale dollar was quoted at $1,418.05.

Financial dollars showed declines: the MEP was trading at $1,415.89 (-1%) and the cash settlement (CCL) at $1,418.14 (-1.5%). The blue dollar, meanwhile, remained at $1,385, the lowest value on the foreign exchange market.

Analysts noted that the sell-off in the agricultural export sector helped stabilize the market: US$224 million on Monday and US$97 million on Tuesday, figures well above the previous week's average.

"The election result was interpreted by investors as a potential obstacle to the continuation of the ruling party's economic reform program. The return of Peronism as a real alternative to power in 2027 began to be re-evaluated, which raised the perception of future political risk," explained Ignacio Morales , Chief Investment Officer of Wise Capital.

For his part, SBS Group chief economist Juan Manuel Franco warned that "it will be key to monitor the dollar's dynamics and see what the government does if the exchange rate pushes above the upper limit of the band. While the Central Bank has liquid reserves to intervene, net reserves are negative, and that limits its room for maneuver ."

In this context, the Treasury faces a crucial tender today, with debt maturing for more than $7.2 trillion. This will be another test of market confidence in the ability of Javier Milei's government to sustain its economic program after the defeat in Buenos Aires.