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Peak buying season. An excellent week for local assets, which benefited from the combination of a more favorable global backdrop and heavy BCRA purchases — the latter taking advantage of increased agribusiness FX settlements and financial loan inflows, particularly from the oil sector. Against this backdrop, the official exchange rate continued to decline, a trend mirrored by interest rates. USD-denominated sovereign bonds staged a strong rally and country risk returned below 600 bps, while equity gains were capped by weakness in the energy sector. On the negative side, economic data released during the week pointed to a significant deterioration in activity indicators and a decline in tax revenues, against a backdrop of upward revisions to inflation expectations for the year. This week’s focus will be on March inflation data and the Treasury auction, where the key question is whether the government can sustain the current rate level.
Congressional progress. On April 9, the Chamber of Deputies approved the reform to the Glaciers Law put forward by President Javier Milei’s administration, with 137 votes in favor, enacting it into law following prior approval in the Senate. The reform eliminates automatic protection for periglacial zones, establishes selective protection for strategic glaciers only, permits mining and hydrocarbon activities subject to environmental assessment, and grants greater authority to the provinces while reducing the binding nature of the national inventory. The Argentine Chamber of Mining Companies (CAEM) viewed the reform as a positive signal for investment and regulatory predictability, while scientific institutions such as IANIGLA warned of a weakening of technical oversight. Markets interpret the reform as Argentina’s attempt to better position itself in the global competition for mining investment, amid growing demand for resources such as copper.
Activity on the decline. In February 2026, economic activity posted a broadly negative performance. Manufacturing output fell 4.0% m/m (seasonally adjusted) and 8.7% y/y, with sharp contractions in textiles (-33.2%), machinery and equipment (-29.4%), and automotive (-24.6%), partially offset by gains in oil refining (+19.7%) and chemicals (+3.7%). Construction declined 1.3% m/m and 0.7% y/y, while mining activity fell 1.0% m/m, though it remained 3.3% above year-ago levels, driven by oil (+15.8%) and non-metallic minerals (+14.3%).
Tax revenues fall. Nominal tax revenues grew 26.2% y/y, but in real terms they deteriorated again, declining 5.1% y/y. The breakdown reflects the higher nominal base of activity-linked taxes: VAT rose 28.7% y/y, the Debit and Credit Tax increased 38.4% y/y, and Income Tax grew 17.1% y/y, while export duties fell 14.6% y/y.
BCRA ramps up FX purchases. Over the past week, the BCRA purchased USD 963M, concentrated mostly in the final two sessions in which it acquired over USD 700M, bringing month-to-date net purchases to USD 1,039M at an average pace of USD 173M/day — a marked acceleration relative to March’s daily average of USD 84M. This pickup reflects both higher agribusiness settlements — in line with seasonal patterns, up ~20% from March at around USD 120M/day vs. USD 100M — and stronger financial loan inflows, particularly from the oil sector. Year-to-date, net purchases now stand at USD 5,425M. These interventions pushed gross international reserves up USD 986M to USD 45,431M, while net reserves also improved, standing at approximately -USD 1,500M under the traditional definition and around -USD 18,000M under the IMF methodology.
The exchange rate extends its decline. The official exchange rate fell 1.0% on the week to ARS 1,373.9, now trading 21.6% below the ceiling of the band. The move occurred even as agribusiness maintained a stable settlement pace of around USD 90M/day and real interest rates continued to ease, aided by an improved global backdrop and a weaker dollar globally. Financial FX rates also declined: the MEP fell 1.6% and the CCL dropped 0.7%, closing at ARS 1,411.7 and ARS 1,477.7, respectively, with the MEP/CCL spread reaching 4.7%, its highest level of the year. FX futures contracts tracked the spot decline, falling 2.6% on the week, with the market trimming implicit devaluation expectations to an average of 1.8% m/m; implied rates currently sit in the 24%–25% NAR range across the curve. Both average traded volume and open interest declined from the prior week, at USD 878M and USD 4,477M respectively, suggesting no BCRA presence.
CER bonds lead again. The peso-denominated curve had a positive week, once again led by CER linkers, which gained 5.1% and now trade at negative real yields through May 2027. On average, the 2026 segment yields CER -6%, the 2027 segment yields around CER flat, and longer maturities yield around CER +6%. Inflation expectations were revised upward: the market is pricing in 2.8% m/m for both March and April, and 31.1% cumulative inflation for 2026. Lecaps followed with a gain of 3.0% on the week, now yielding below 2.0% EMR through June and between 2.0%–2.2% EMR further out. Dual bonds lagged, in a context where the Tamar rate was cut to 23.4% NAR — its lowest nominal level in two years — with duals currently pricing a spread of approximately 2.5% above that rate and a breakeven in the 22%–23% NAR range. Finally, dollar-linked bonds were the worst performers amid the broad exchange rate decline, losing 0.2% on the week. At current prices they yield devaluation +5%, pricing in a direct implied devaluation of 0.6% in April and 5.2% in June, implying an FX level of ARS 1,382 and ARS 1,444, respectively.
Country risk back below 600 bps. USD-denominated sovereigns had a strong week, averaging gains of 5.7%, outperforming comparable EM peers by 2.0% and tightening the spread vs. the LatAm index by 44 bps to 268 bps. The rally was driven by a favorable global backdrop and BCRA reserve accumulation in the FX market. Country risk closed at 553 bps, returning to pre-conflict levels. Month-to-date, sovereigns are up 4.2%. The advance was led by the long end of both Globals and Bonares: the GD41 topped the table with a gain of 7.5%, followed by the AL35 at +5.7%. In yield terms, Bonares range from 6.9% (short end) to 9.7% (long end), while Globals trade in the 6.7%–9.3% range. Bopreales gained 0.9% on the week but remain down 3.1% month-to-date, with the Series 3 leading at +3.1% and Series 1-A at +1.8%. The BCRA curve currently yields 1.9%–7.7%. Provincial bonds rose 1.0% on the week in line with the sovereign trend, accumulating +1.6% in April; the PBA 2037 was the top performer at +2.3%, with the segment offering yields between 5.2% and 12.1%. Corporate bonds posted a modest gain of 0.1% both on the week and month-to-date. Under local law, Vista 2029 led with +2.4%, while under foreign law YPF 2031 topped the segment at +0.7%. This performance contrasts with the equity market, where energy companies retreated. Local-law corporate yields range from 4.9% to 5.6%, while foreign-law corporates trade between 7.6% and 8.0%.
Merval capped by energy stocks. The Merval was flat in peso terms and gained 0.7% in CCL dollar terms on the week, closing at USD 2,029. This underperformed the LatAm equity index, which advanced 6.0%. Month-to-date, the Merval in dollar terms is up 5.4%, and +1.4% year-to-date. Weekly and monthly gains were driven by construction, materials, and financials on the back of improved global conditions, while the energy sector — which had led the index in March — weighed on performance amid the oil price decline. Top weekly gainers were LOMA, VALO, and Holcim (+7.8% to +8.6%), while COME, Transener, and Edenor were the biggest laggards (-7.0% to -9.9%). Month-to-date, VALO, Holcim, and LOMA are up 17.3%–19.2%, while YPF, TGS, and COME are down 2.7%–6.9%. ADRs were roughly flat on the week but are up 5.7% in April. Weekly outperformers included Bioceres, Corporación América, and LOMA (+4.2% to +16.0%), while Globant, Edenor, and TGS fell 2.5%–4.5%. Month-to-date, Bioceres, Supervielle, and Banco Macro lead with gains of 14.3%–35.4%, while Vista, YPF, and AdecoAgro are the biggest decliners at -5.7% to -13.7%.
