"Argentina's New President Javier Milei: A Cautious Start and Economic Measures Await"

Argentina's financial markets responded cautiously to the start of the Javier Milei era, with local stocks rising and the official peso dipping. Investors are waiting for the new president to implement his promised economic shock therapy, which includes a fiscal adjustment equivalent to 5% of GDP through cuts that will primarily affect the state. Milei's inaugural speech lacked detail on economic plans, but the new economy minister is expected to lay out key measures on Tuesday. The task of enacting deep cuts to public spending is challenging, given hyperinflation, recession, and depleted reserves. Argentina faces significant debt payments in the coming years, and a restructuring or default event is seen as likely by ratings agency Fitch. However, some argue that this scenario is already priced into the market.