Argentina's 10% Bond Yields Tempt Buyers Even as Election Risk Builds

Argentine dollar bonds, down more than 6% since end-July and the worst performers among emerging-market sovereigns this quarter, are drawing renewed investor interest at double-digit yields despite Milei's weak approval ratings ahead of the 2027 election. Morgan Stanley recommended adding long-end dollar bonds, calling 10% yields 'too cheap' to pass up, while Vontobel, Schroders, and hedge fund ProMeritum Investment Management increased exposure. Argentina's country risk index stood at 533 points, a sixth consecutive daily rise, the same day Argentina repaid roughly $803 million (SDR 583.3 million) to the IMF. Bulls point to an intact fiscal anchor, growing FX reserves, and a fragmented Peronist opposition; bears cite a weak labor market, slowing growth, stalled reform legislation, and congressional resistance to ratifying the US trade deal.