Argentina is voting, and markets are already twitching. With midterms underway, everyone tied to pesos and bonds is watching minute by minute, not because they love politics, but because the future of President Javier Milei’s free-market plan is hanging in the air.

A brutal selloff last month already reminded investors what can happen when things go sideways, and this vote could break what’s left or buy Milei more time, no in-betweens.

Half of the Chamber of Deputies and one-third of the Senate are up for grabs.

Milei’s party, La Libertad Avanza (LLA), is still tiny. It holds just 37 out of 257 lower house seats, and only 6 of 72 in the Senate. A majority is mathematically impossible.

But that’s not the point. If LLA scores above 35%, or more than the Fuerza Patria opposition, analysts say it might calm the peso chaos… for now.

Peso sinks while Milei pushes for congressional gains

The Argentine peso is in rough shape. It plunged to a record 1,490 per dollar earlier this week. Traders are now betting on another devaluation, no matter what Milei says.

“There is a great deal of uncertainty,” said Nery Persichini, head of strategy at GMA Capital. “The better the government performs, the stronger the peso and other assets will be. If it loses badly, Monday will be very sour.”

That pessimism started building last month after Milei’s candidates lost badly in a provincial race. Then came multiple defeats in Congress, triggering panic, as the peso came under fire, and whispers of an unplanned devaluation started flying.

Some thought he wouldn’t survive politically, but instead, he kept doubling down, and now, his entire legislative agenda (tax, labor, austerity) is riding on this vote.

Despite all this, Milei somehow got help from abroad. The US Treasury intervened directly in Argentina’s currency market and helped the central bank secure a $20 billion swap line. That lifeline hasn’t stopped the bleeding.

Global funds have been pulling out. Local savers are converting pesos into dollars fast, expecting the exchange rate will fall again the moment polls close.

There’s also a political calculation. Milei’s team knows they don’t need to win a majority; they just need a number big enough to scare moderate parties into cooperating.

“What’s at stake is how much it costs Milei to pass bills in Congress,” said Juan Germano, head of political consultancy Isonomía. “The result is very important, and there is a very fine line between victory and defeat.”

Frustration rises as economy and reforms stall

Milei’s campaign message in 2023 was anti-corruption and austerity. Now it’s 2025, and both are under fire.

Argentina’s economy has been shrinking since May, with inflation way down (from 289% in April 2024 to 32% now, the lowest in seven years), but wages and pensions are falling behind. People are angry.

You add in those multiple corruption scandals, and the trust problem gets worse.

Polls are showing a tight race. Projections for LLA’s vote share hover between 34% and 42%, but their edge over Fuerza Patria has been slipping.

UBS strategist Pedro Quintanilla-Dieck said markets aren’t feeling confident. “They’re not expecting a strong result,” he said. “We’re seeing expectations in the low 30s.”

The peso’s future looks fragile. Analysts doubt the government can keep defending the current exchange band.

Billions have already been spent holding the line. Most see that defense as temporary. Many assume Milei is just waiting for the vote to end before letting the peso drop again.

Trump added more pressure. He warned publicly that if Milei’s plan fails at the polls, his administration would pull the plug on support.

That message shook confidence further, especially among bondholders already watching yields jump.

At his final campaign rally, Milei called this a turning point. “For the first time in 100 years we have an opportunity to change the future of this country,” he said. “Don’t waste this opportunity.”

But if LLA can’t pull off a decent showing, the next big move in Argentina might be out of his hands.

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