The defeat of Argentine president Mauricio Macri and his liberal agenda already affects the Brazilian economy; Jair Bolsonaro and Alberto Fernández exchange accusations

Argentine President Mauricio Macri was defeated by a large advantage in the country's primary elections by opposition candidate Alberto Fernández, whose deputy is former President Cristina Kirchner.

The advantage of Fernández's bid scared the financial markets. The candidate's unorthodox economic agenda is not accepted by the financial market.

The problem is that Macri's orthodox and reformist economic agenda has not brought the expected growth, but the country has worsened in many ways. When he was elected, Macri promised to end poverty, but it increased during his rule. He said he would run a liberal bias government, but ended up freezing prices for more than 60 products.

After 4 years, the population did not feel life improve with Macri. Many say it got worse. The answer, at the ballot box, is the return of Cristina Kirchner, Fernández's vice president.

The result has caused the Argentine stock market to plummet 48% (the biggest global loss on a stock exchange in one day in the last 70 years, according to Bloomberg), and the dollar has risen 30% to 58.85 pesos and was also felt in Brazil, which registered a drop of 2% in Ibovespa and dollar to $ 4. Argentina is an important market buyer of Brazilian goods - were $ 15 billion in exports last year alone.

Brazilian exports to Argentina have already shrunk by 40% in the first seven months of 2019.

The change could also affect the Brazilian market as Macri is a strategic ally of the country in negotiations for a deal between Mercosur and the European Union. President Jair Bolsonaro went public with open criticism of candidate Alberto Fernández, who responded in the same tone by calling Bolsonaro "racist, misogynist and violent."

Macri's defeat in regional election in Argentina surprises the Brazilian financial market; currency market reacts by devaluing the Argentine peso

The Front of All slogan, formed by Alberto Fernández and former President Cristina Kirchner, imposed a severe defeat on Argentine President Mauricio Macri in the primary elections held yesterday. Macri lost by a difference of 18 percentage points. In Buenos Aires, the country's largest electoral stronghold, the victory of Kirchnerist Alex Kicillof in the race for the office of governor points to a possible defeat by Macri in the October 27 general election.

A possible government with Cristina Kirchner as vice president will probably distance politically the Argentinians from Brazil. Argentina is Brazil's largest trading partner, but after President Jair Bolsonaro has publicly supported Macri's reelection and criticized Kirchnerist presidential candidate Alberto Fernández, who visited former President Lula in prison, the relations between the two countries will surely suffer a severe blow whit a Fernández and Kirchner victory.

Under Macri (2015-currently), the Argentine economy has not taken off. Inflation remains high (55% accumulated in 12 months) and the peso (Argentine currency) is strongly devaluated against the dollar. The tendency now is for this devaluation to be stronger due to the financial market fears of a possible Fernández victory.

Today, the first reaction of the markets was falling bonds and shares with falls of up to 35% in the price prior to opening. The shares of the Argentine companies collapsed about 20% in premarket of the New York Stock Exchange. The dollar is being sold between 49 and 51 Argentinian pesos.