Argentina's peso dropped again on Tuesday after a shocking defeat for business friendly President Mauricio Macri in Sunday's primary election raised fears of populist policies, although Latin American stock markets rebounded after the United States delayed tariffs on certain Chinese goods. The peso fell another 4% after a near 16% plunge on Monday. The currency had fallen 30% to record low of 61.995 per dollar in the previous session, sending shockwaves across global financial markets.
Opposition candidate Alberto Fernandez, who has former President Cristina Fernandez as his running mate, pulled off a stunning upset in the primary with a wider-than-expected 15-point lead over incumbent president Macri. The cost of insuring against an Argentine sovereign default jumped again on Tuesday. Data provider IHS Markit showed five-year credit default swaps (CDS) marked at 2,116 basis points, up from what was already a five-year high the previous day.
However, the Merval stock index rose more than 10% after closing down 31% on Monday. Equities and other risk assets across the globe took relief from news that the Trump administration will delay 10% tariffs on certain Chinese products, including laptops and cell phones, that had been scheduled to start next month.
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