Argentina Can’t Shake Its Turmoil Without End

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Mauricio Macri is waking up with an almighty political hangover.

The scale of the Argentine leader’s defeat in yesterday’s primary vote took pollsters and investors by surprise: Markets rose on Friday in expectation that he’d emerge with enough momentum to have a good shot at winning a second term in October’s presidential election.

Now a market sell-off looms, and Macri’s presidential ambitions are hanging by a thread.

The result is testament to Argentina’s near-permanent state of economic crisis and a revolving door of political fixes.

Macri came to office in 2015 pledging a turnaround from the years of Cristina Kirchner, who presided over default and capital controls that made Argentina an international pariah.

Four years on, Argentina is still in recession and saddled with rampant inflation, with bolted-on austerity following a record International Monetary Fund bailout Macri was forced to request last year.

Voters used the primary — essentially a poll of national sentiment — to signal their dissatisfaction with Macri’s course. What is most worrying for investors is that the electorate instead opted for Alberto Fernandez, who has Kirchner as his running mate. Fernandez tried to reassure markets yesterday. But it’s unlikely to stop the rout today.

Investors are clear they want Macri in power. Argentina’s voters seem to have other ideas.

Global Headlines

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What to Watch This Week

Parliament leaders in Rome meet today to set a date for the no-confidence vote that will most likely set Italy on track for a snap election in the fall. Political fallout from Jeffrey Epstein’s ties to Trump, former president Bill Clinton and others could continue following the indicted financier’s apparent suicide. Former White House counsel Gregory Craig — a rare Democrat caught up in Special Counsel Robert Mueller’s investigation into Russian election meddling — faces a jury today over criminal charges that could send him to prison for five years. The National Rifle Association is set to square off against the city of Los Angeles as the gun-rights group seeks to overturn a law requiring contractors to disclose all business ties to the organization. Large parts of Kashmir remain cut off from the rest of the world as a communications blackout entered its eighth day, although India said it would soon begin easing restrictions.

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