Argentina's macro wins collide with Wall Street's sudden cold shoulder.

The week closed for Argentina with a tension that defines its economic moment with unusual clarity: while macroeconomic indicators posted the best session of the year, global financial markets pivoted in the opposite direction, stripping the government of some of the shine from its own achievements.

On Thursday, the S&P Merval shed 3.2% to close at 3,185,257 points, and ADRs of Argentine companies on Wall Street suffered losses that in some cases exceeded 6%, with Satellogic plummeting 9.9% and banking shares —Supervielle, Macro, and Francés— retreating between 5.7% and 6.2%. JP Morgan's country risk index climbed six units to 410 basis points, drifting away from the libertarian administration's historical low touched just the previous Friday, when it broke below 402. The trigger was not local: remarks from Dallas Fed President Lorie Logan, who noted that "slightly higher" rates could be needed to balance the inflation and employment outlook in the United States, revived the specter of tighter monetary policy precisely when markets had celebrated Tuesday's U.S. deflation reading with relief. The war in the Middle East, which keeps Brent crude near USD 84 per barrel and threatens to simultaneously close the Strait of Hormuz and the Bab el-Mandeb — as the IMF itself warned this week — operates as a permanent background pressure.

The paradox is striking. Just forty-eight hours earlier, Argentina was experiencing what traders informally dubbed "Super Tuesday": INDEC confirmed that June inflation came in at 1.9%, the first reading below 2% in ten months and the third consecutive monthly decline. Core inflation dropped to 1.6%. Food and beverages rose just 1.3%. Minister Luis Caputo celebrated the figure on social media with a soccer-flavored jab at France. That same day, the Central Bank absorbed USD 532 million in a single session — the largest figure of the Milei era and since December 2022 — partly as a result of the liquidation of a negotiable obligation in a "block" transaction. On a weekly basis, the BCRA exceeded USD 1 billion in purchases and has accumulated more than USD 12.5 billion so far this year. Private dollar deposits reached a historical record of USD 40.437 billion, driven by the crediting of amortizations from the July 9 sovereign maturity. The wholesale exchange rate held steady around $1,476, with the blue-chip dollar trading at $1,525, 3.3% above the official rate.

Against that backdrop of currency calm and disinflation, the Economy Ministry successfully completed the placement of the Bonar 2029 (AO29), raising USD 620 million across two sessions — USD 470 million on Wednesday at a nominal annual rate of 7.99% and an additional USD 150 million on Thursday. Demand far exceeded the allocated supply: the first auction drew bids for USD 985 million. Caputo opted to award less than what the market was willing to absorb, thereby preserving the rate below the 8% psychological threshold and signaling financial discipline. With this instrument, the Treasury seeks to finance the remaining 2026 maturities and build reserves for 2027, when financing needs are estimated at USD 5 billion in an election year that will complicate demand for local sovereign debt and accelerate portfolio dollarization. The competition the Treasury will face with the private sector to capture those dollars in 2027 is already a topic of debate among analysts.

The fiscal result for the first half of the year, however, showed a crack that markets did not overlook. The national public sector closed June with a primary deficit of $697 billion, attributed to the payment of the half-year bonus and the postponement of the income tax maturity for individuals until July 27. The semester accumulated a primary surplus of 0.6% of GDP and a financial surplus of 0.1%. But private calculations produced by consulting firms such as Analytica, Equilibra, and Romano Group indicated that, when excluding extraordinary income from privatizations under the methodology agreed with the IMF, the government would have missed the second-quarter fiscal target by a deviation of close to 8%. To compensate, the Executive published a DNU that expands the budget by $4.4 trillion and incorporates the Central Bank's 2025 earnings — more than $25 trillion — as Treasury income, an extraordinary resource that allowed it to reinforce budget lines without resorting to money printing.

The debate over the "K-shaped economy" that has divided export sectors from domestic sectors took center stage at the Buenos Aires Stock Exchange, where Milei marked the institution's 172nd anniversary with a speech that rejected that characterization, labeled entrepreneurs seeking state protection as "parasites," and defended private property as a sine qua non of growth. Meanwhile, the Palermo Rural Exposition began its 138th edition with the agricultural sector demanding the elimination of export duties and pointing to infrastructure as the most urgent bottleneck. Agriculture Secretary Sergio Iraeta reported progress on the Mercosur-European Union agreement and described as "good news" the European Parliament's decision not to classify Argentine soybeans as high risk for indirect land-use change, which protects biodiesel exports valued at some USD 350 million annually.

The flip side of the macroeconomic adjustment was read with clarity in employment and credit data. Since November 2023, 329,667 registered salaried jobs have been lost in the private sector, with formal private employment hitting its lowest level in four years in April 2026. Labor informality climbed to 43.6% of private salaried workers in the first quarter, one percentage point higher than a year earlier. Private-sector credit delinquency rose from 2% in November 2024 to 9.7% in May 2026, while nearly 5.8 million people — 28% of those with some type of financing — fell into default. Argentines today allocate 24.1% of the formal wage bill to debt servicing, according to the Central Bank. Industrial installed capacity stood at 58.4% in May, with sectors such as metalworking and rubber and plastic products operating below 40%.

What warrants monitoring from here on out is manifold: the Fed's Federal Open Market Committee meeting on July 29, which could raise U.S. rates and pressure Argentine country risk; the negotiation over the extension