Argentine stocks reversed an early decline Tuesday, closing with gains as investors reacted to January inflation data and ongoing debate over labor reforms. The S&P Merval index advanced sharply, whereas dollar-denominated bonds as well finished in positive territory.
The January inflation rate came in at 2.9%, exceeding market expectations. This figure arrived amid controversy following the departure of INDEC head Marcos Lavagna and debate over updating the consumer price index methodology.
Argentina’s Economy Ministry, led by Luis Caputo, convened a meeting Tuesday afternoon with a select group of brokerage firms, according to market sources. While the agenda wasn’t officially confirmed, the market indicated the focus was on the implementation of the Tax Amnesty law and its effects on capital markets. Discussions may have also included potential changes to exchange restrictions, clarifications on dollar-denominated financial operations, and measures to unlock flows into the capital market.
ADRs initially fell but ultimately registered gains of up to 3%. Pampa Energía (+3.1%), Grupo Financiero Galicia (+3%), and Transportadora de Gas del Sur (+3%) led the day’s advances.
The government is aiming to increase dollar deposits based on previously undeclared holdings through the Tax Amnesty law, hoping the measure will help reactivate the economy.
The wholesale dollar rate fell 1% to $1,406, touching $1,400 during trading – its lowest level since mid-October. The Central Bank purchased USD $42 million on Tuesday, adding USD $1.694 billion so far in 2026.
“There is a need for comprehensive labor reform. It is necessary to reverse the long period of stagnation in the generation of formal employment in the private sector in Argentina,” said the Libertad y Progreso Foundation, citing a petition signed by various organizations. The Senate will start debating the labor project on Wednesday, with the government seeking a broad consensus.
Bonos y riesgo país
In the fixed income curve, bonds traded with marked volatility. After a start to the session with mostly “red” (negative) signals, titles reversed course and closed with positive signs. The Global 2029 (+1.7%), Global 2046 (+1.3%), and Bonar 2029 (+0.5%) saw particularly strong gains.
A slight weakening of the dollar globally supported the Central Bank’s (BCRA) growing reserves, as the entity daily adds foreign currency through its exchange rate intervention, which encourages a slight retreat in country risk levels to around 500 basis points.
CER-adjusted bonds rose 0.2% in the short term and remained flat in the long term. The fixed-rate segment operated slightly higher, rising an average of 0.1%. Floaters rose 0.1% in the short term and 0.6% in the long term, according to Grupo SBS.
January inflation jumped to 2.9%, above the market’s 2.4% projection, amid controversy after the government delayed implementing a modern base formula that would give greater weight to services.
The controversy over the application of the new index intensified when Marco Lavagna resigned from his position at the National Institute of Statistics and Censuses (INDEC) after six years at the helm. Lavagna stepped down, marking the 224th resignation of the milei government, and there is no longer sufficient consensus within the government for the measurement based on the National Household Expenditure Survey (ENGHo), conducted between 2017 and 2018, to be published with the January 2026 inflation data.
Aldazabal warned that January inflation returned to above-expected levels, driven by seasonal prices and a core component that showed greater resistance than anticipated, even in a context of peso appreciation and high interest rates. They indicated that February could show a temporary slowdown due to seasonal factors, even though the impact of tariff and regulated service adjustments would limit the decline, keeping monthly inflation above 2.5%.
Finally, the Treasury will hold an internal debt auction on Wednesday to cover nearly $10 trillion in maturities, through four fixed-rate papers, two linked to ‘Tamar’, four ‘Boncer’ and another letter linked to the ‘dollar linked’. “The focus will be not only on the ‘rollover’ (renewal) but on the rates validated with respect to operations in the secondary market, in a context where seasonal demand for pesos is beginning to subside,” added SBS.
