Argentina's president-elect Alberto Fernandez pledged to lead the country in a new direction on Tuesday amid a “difficult” domestic backdrop, as financial markets jumped around with investors grasping for any signs of the Peronist's future plans.
The peso currency and over-the-counter bonds edged up after earlier falls, while the Merval stock index was flat. The black market peso jumped steeply on month-end demand for local currency after a pre-election sell-off last Friday.
Argentine investors and creditors are closely watching Fernandez for signals about his potential policies on the economy, his approach to the country's mountainous debt pile and he likely make-up of his key team of advisors.
On Tuesday, a spokesman for the center-left leader confirmed he had appointed a small transition team until his government takes over in December, though there was no clear sign yet of his picks for key economy roles.
Fernandez, who won an election victory on Sunday, appointed a four-person team of confidante Santiago Cafiero, Kirchnerist Eduardo de Pedro, former justice minister Gustavo Beliz and former senator Vilma Ibarra to negotiate the transfer of power with defeated incumbent Mauricio Macri's team.
The group does not include any economists, leaving up in the air the key question investors are asking about who will lead Fernandez's economic team as the country's grapples with currency and debt crises.
Traders are sensitive and impatient given the high vulnerability with the complex current scenario, said Gustavo Ber, Buenos Aires-based senior economist at Estudio Ber. They want him to define things quickly, to allow them to not only get past the electoral uncertainty but also make clear the future economic outlook.
If we do the same things we will have the same results, Fernandez said in a speech in the northwestern province of Tucuman, where he pledged to bolster jobs and stamp out issues like hunger which have worsened alongside a rising poverty rate. The current situation looks difficult. It is, he added, without giving any details about his potential policy plans.
Markets are closely watching for signals from Fernandez about how he will work with outgoing president Mauricio Macri to smooth what has potential to be a tricky transition until the new government starts on Dec. 10.
Argentine media has reported that Cafiero could be in line to be the Cabinet chief, while de Pedro is a potential interior minister. Ibarra, who previously dated Fernandez, wrote a book called Cristina versus Cristina about his now running mate.
Beliz served under Carlos Menem in the nineties and with former President Nestor Kirchner, during whose administration Fernandez was chief of staff.
Argentina's sovereign dollar bonds came under pressure earlier on Tuesday, with the benchmark international 2028 dollar bond down 1.1 cents to 37.1 cents in the dollar, while the 2023 issue slipped 0.9 cents to 39.36 cents in the dollar, according to Refinitiv data.