Argentina's inflation may finally break below 2%, but oil chaos and factory closures tell a darker story.

The data point Argentina has been awaiting for months arrives this Tuesday with an unusual weight: for the first time in ten months, Indec could confirm monthly inflation with a "1 handle." The Central Bank's Market Expectations Survey placed the consultancies' median at exactly 2% for June, while more optimistic private estimates point to a range of 1.8% to 1.9%, in line with the 1.81% recorded by the City of Buenos Aires CPI. If the national figure confirms that trend, it would mark the first month below the 2% threshold since August 2025 and the third consecutive decline from May's 2.1%. Minister Luis Caputo declined to preview a specific number but urged Argentines to stay "calm" because "inflation will keep coming down."

Today's session has, however, another axis that complicates the reading: the U.S. inflation figure for June is also released, and the market anticipates monthly deflation of roughly -0.2%, the first in two years. The direct cause is the drop in oil prices, which during June retreated to the USD 70 per barrel area following a truce in the Persian Gulf conflict. That same truce broke during Argentina's long weekend, and the consequences were immediate and violent: Brent crude jumped 9.8% on Monday's session to USD 83.43 per barrel, WTI advanced 9.4% to USD 78.13, and the dollar strengthened against the world's six major currencies to its highest level since January 2025. President Donald Trump's comments about taking "control" of the Strait of Hormuz and demanding a 20% toll on each ship's cargo added another layer of uncertainty to an already jittery market.

The impact on Argentine assets was immediate but asymmetric. Equities fell across the board — the S&P Merval retreated 1.4% in pesos and the ADRs of banks such as BBVA lost as much as 5.6% — but energy names swam against the current: YPF advanced 4% and Vista Energy climbed 3%, directly benefiting from the rise in crude. The most striking exception was Globant, which climbed 7.2% on Wall Street on the sidelines of oil geopolitics. Country risk, which had brushed 400 basis points at lows since April 2018, failed to pierce that psychological threshold in Monday's session and closed around 403 points, hit by global risk aversion. Nevertheless, the local financial architecture cushioned the blow better than any other country in the region, market participants noted.

Against this backdrop, the Central Bank took advantage of soft dollar demand to execute its largest reserve purchase in forty-five days: USD 280 million in a single session, extending its streak to 125 consecutive days with a positive balance and more than USD 11.7 billion in net purchases so far in 2026. The wholesale dollar shed six pesos, to $1,482, wiping out the entire July gain and widening the gap with the upper band of the currency corridor to 23%. Analysts read the move as tactical official intervention, with the BCRA selling futures and dollar-linked bonds when the dollar threatens to rise, creating a de facto ceiling near $1,500. The blue dollar, meanwhile, rebounded $15 and closed at $1,525.

The week ahead brings another key test for Caputo's financial program: on Wednesday the call to auction is launched and on Friday the Bonar 2029 (AO29) opens, through which the Treasury seeks to raise up to USD 2 billion with no cap on the amount in the first round, differentiating it from the previous Bonar 2027 and 2028 issuances. The move aims squarely at capturing a slice of the USD 4.385 billion in principal and interest on Bonares and Globales that the Treasury just paid, of which roughly USD 1.2 billion was credited to local accounts. The market is watching closely how much of that fresh cash chooses to be reinvested in sovereign debt versus other instruments. Analysts at EconViews note that the payment horizon between August and December, with USD 4.9 billion in maturities of which more than half corresponds to the IMF, looks more manageable than the first half of the year.

Behind the financial headlines, the real economy is showing a far more complex and worrying texture. Industry has accumulated a 3.1% contraction so far in 2026 and is operating with idle capacity of nearly 40%. Consultancy Industria y Desarrollo projects the loss of 105,000 manufacturing jobs during the year, 60,000 of them direct. The sector is suffering what Diego Coatz, former executive director of UIA, calls the "sandwich effect": falling sales on one side, electricity costs for large users soaring 79% on the other. At the level of the labor market as a whole, UCA warned that in the past decade nearly one million salaried positions have been lost and that underemployment is growing faster than employment: nine out of ten people who found work in the past year need to work more hours. The number of platform delivery workers grew 900% in six years, surpassing one million, and the Central Bank is already detecting average debts of $900,000 per delivery worker. Bread sales fell 60% and pastry sales 85% over eighteen months, according to the sector's union. Empty storefronts on the main avenues of Buenos Aires grew 22% year-on-year.

On the external front, the energy surplus in the first half reached USD 6.987 billion, the largest in history for that period and USD 828 million shy of the full-year 2025 record, driven by fuel exports that jumped 52% to USD 8.118 billion. Vaca Muerta already accounts for two out of every three barrels produced in the country. Wheat exports totaled a record USD 3.122 billion in the marketing campaign and sunflower exports more than doubled in value during the first half, with USD 1.674 billion exported between January and May. In the wine sector, however, the picture precisely illustrates the trap of volumes without value: the Instituto Nacional de Vitivinicultura reported that wine exports grew 14.2% in liters during the half but barely 2.6% in dollars, because the average price per liter fell 10.2%, from USD 3.47 to USD 3.11.

The regulatory front is advancing in parallel. The Government will send to Congress this week, before the winter recess, a deregulation package that includes the real estate market — elimination of mandatory professional licensing and minimum fees for brokers — the capital market, and the cab