Optimism surrounding Argentina may be overdone

Bond markets have reacted positively to election results in Argentina which effectively mean that the incumbent, Cristina Fernandez de Kirchner, will be unable to serve beyond her current term ending in 2015. Indeed, the prospect of a more ‘market-friendly’ government has led to returns on Argentinean bonds surpassing those in the rest of the emerging world so far this year, while stripped credit spreads are now lower than in other countries facing major economic challenges, like Venezuela and Ukraine.