Argentina’s Markets Face Political Crosswinds

Argentina’s main stock index slipped roughly 2 % after a brief rally, reflecting trader unease over recent political developments.

• Labor Law Debate:
  Lawmakers are discussing a new labor law championed by President Javier Milei, which could reshape employer‑employee relations.

• New Dollar Policy:
  Authorities have introduced rules permitting the import of hidden U.S. dollars—termed “mattress dollars”—into banks without source verification.
  Estimated value: ~$170 billion.
  Transactions under 100 million pesos would move freely, offering a formal channel for undeclared cash up to roughly $65 000 (not a tax amnesty).

• Central Bank Actions:
  The central bank purchased $317 million in dollars last week, keeping the peso steady at 1,432 per dollar.

• Bond Market:
  Local bond prices edged up slightly but remain about 3 % below 2023 highs in dollar terms.

• Sectoral Impact:
  Analysts note that uneven sector recovery and slow reform rollout are dampening overall market performance.

Investors closely monitor the Senate debate and the new dollar‑inclusion scheme to decide their next moves.