00:00And Argentina's dollar bonds jumped to record highs after President Javier Malay's party scored a much stronger than expected win in Sunday's legislative elections, easing investor fears over his reforms getting capped in Argentina.
00:17The peso also jumping on the news. Markets expected a weaker showing, but Malay's bloc won 41 percent of votes, securing major congressional gains.
00:27President Trump called the victory a big win. The U.S. provided extraordinary backing to Argentina, buying over a billion dollars in pesos in the lead up to the election, a bet which appears to have paid off bigly.
00:41Danny?
00:41Matt, joining us now live from Buenos Aires for more on that election is Manuela Tobias, Bloomberg Argentina reporter.
00:47Manuela, much better turnout and victory for Malay and his party than expected.
00:54Why was it such a better result than had been set in for expectations?
01:00Yeah, it's a great question.
01:01So just a month ago on September 7th, the province of Buenos Aires, by far the biggest province, delivered a terrible result to Malay.
01:13He lost by nearly 14 points to the leftist opposition.
01:18And so markets were bracing for the worst last night, thinking that Malay could even maybe get less than 30 percent.
01:27And he got 41 percent and trounced the opposition by more than nine points.
01:34So expectations were just so low that he blew them out of the water.
01:38And so we're seeing everything rally this morning in Buenos Aires.
01:43What does this mean, Manuela?
01:45Does this mean Argentinians who are suffering great economic hardship are willing to stick through the pain of these reforms, hoping to break the cycle of defaults?
01:59It's a great question.
02:00Yeah, basically it means that patience is not up just yet for Malay.
02:06We had pretty low voter turnout last night.
02:10Sixty eight percent is low in a country with compulsory voting.
02:15So it doesn't mean everyone is on board, but it does give him breathing room in the next two years to pass the reforms that Argentina needs to generate lasting growth.
02:26So far, Malay has had tremendous success in wrangling down inflation, but he hasn't been able to deliver on jobs or on attracting foreign investment because he needs the Congress for that.
02:41And he had less than 15 percent of seats.
02:43Now he's more than doubled his representation in both chambers, which is going to give him a fighting chance to actually muscle through the reforms and give him a fighting chance at reelection in 2027.
02:57You're looking at the celebration that markets are doing right now, Manuela.
03:00We're looking at the Argentinian peso, stronger versus the dollar by eight and a half percent.
03:05You mentioned some of the roadblocks.
03:07How important will those be to overcome, to continue a rally that we're witnessing right now?
03:14So even though Malay had an amazing showing, he is still far short of a simple majority in either chamber, even in the lower house.
03:23And so that means that he's going to have to come to the table and negotiate with moderate blocs in order to get anything done.
03:34Really, that got really, really hard in the last couple of months as Malay's rhetoric turned more and more aggressive, even with the most like minded allies.
03:48All right, Manuela, thanks so much for joining us, Manuela Tobias.
03:52They are coming to us out of the Argentinian capital.
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