Argentina country risk hits 655 points, a fresh 2026 high

Argentina's country risk index closed the week at 655 basis points, its highest nominal level of the year, according to the measure prepared by JP Morgan. The reading surpassed the previous 2026 peak of 637 points registered on March 30. The indicator climbed 48 units, or 7.9%, in the first two days of October. That moved the index to levels unseen since November of last year, accumulating an increase of 84 points, or 14.7%, so far this year.

The jump tracked drops across Argentine sovereign dollar bonds. Short-term Global bonds declined up to 0.7%, while long-term issues fell as much as 2.8%. After approaching 600 points in late September, the indicator resumed its climb at the start of October as external pressures weighed on emerging debt.

Global market pressures intensified as the 10-year US Treasury yield closed at 5.28%, reaching levels not seen since 2007. Portfolio Personal Inversiones reported that emerging market bonds fell 1.7% over the week. Grupo IEB noted that higher US yields triggered a global asset sell-off, with Argentine fixed income experiencing one of its worst weeks of the year due to lower credit ratings, high market liquidity that facilitates quick exits, and political uncertainty.

Speaking at the close of Argentina Week in Paris, Economy Minister Luis Caputo highlighted that country risk had previously fallen from around 2,500 points to near 600 points. He attributed recent volatility partly to electoral concerns raised by financial investors during meetings in New York about the risk of a return of Kirchnerism, alongside oil price effects and international interest rate increases.

Domestic economic indicators also raised questions among investors. GMA Capital warned of technical recession risks following a 0.6% decline in second-quarter gross activity and a 2.9% drop in the EMAE monthly economic activity estimator for July, though tax collection figures for August provided some relief.