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ECONOMY | 12-06-2019 09:25

Wall Street applauds Macri's choice for vice-president

Yields on Argentine sovereign debt registered their biggest drop since August 2016, amid optimism that Pichetto, an opposition leader who has previously been critical of the government, will boost Macri's chances with moderate voters at the ballot box.

President Mauricio Macri's unexpected choice for running-mate in the October elections, opposition senator Miguel Ángel Pichetto, was cheered by the bond markets and traders yesterday.

Yields on Argentine sovereign debt registered their biggest drop since August 2016, according to data collected by JPMorgan Chase & Co, amid optimism that Pichetto, an opposition Justicialist Party (PJ) leader who has previously been critical of the government, will boost Macri's chances with moderate voters at the ballot box.

The president's decision comes a month after rival Cristina Fernández de Kirchner surprised investors and traders by opting to run as a vice-presidential candidate alongside Casa Rosada hopeful Alberto Fernández, her former Cabinet chief. Both tickets – the 'Fernaández-Fernández' option and the 'Macri-Pichetto' line-up – are seen by analysts as moves by both sides to attract undecided moderate voters, with polls indicating the race will go down to the wire.

Patrick Esteruelas, senior analyst at Emso Asset Management firm in New York, said the decision had the potential to reshape the race from a three-horse race to a two-horse race, eliminating other options, had left the markets more confident Macri would win a second term in office, which would run until 2023.

The peso is expected to fluctuate on the exchange markets on Wednesday. The national currency closed Tuesday at 44.70 per US dollar.

The choice of Pichetto as VP candidate ends weeks of speculation over the identity of Macri's running-mate, with the president needing to expand his reach and improve his popularity, with Argentina still gripped by economic recession.

It had been anticipated for some time that Argentina's current vice-president and Macri's longtime ally, Gabriela Michetti, would not stand for another term as number two.

President Macri will meet this morning with Pichetto, a senator for Rio Negro Province at the Olivos presidential residence, as the duo draw up plans for he rest of the campaign. 

- TIMES/BLOOMBERG/NA

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