Inflation hits decade low as factories idle and joblessness deepens.

The convergence of three positive data points in less than 48 hours — June inflation at 1.9%, record reserve purchases by the central bank, and a successful dollar debt placement — produced this week the strongest alignment of financial indicators in favor of Javier Milei's government since the monetary program began, and triggered a coordinated move in asset prices that warrants explanation.

Indec published on Tuesday a CPI reading of 1.9% for June, the first print below 2% in ten months and the third consecutive month of deceleration. Core inflation fell to 1.6%, its lowest level since July 2025. Food and beverages rose just 1.3%, with meat prices essentially flat across the country's main regions, acting as an anchor on the headline index. The notable exception was tomatoes, whose price jumped 22.5% during the month due to ripening problems caused by the cold winter, pushing imports from Chile to a record 3,248 tons in June. Economist Marina Dal Poggetto warned that the favorable reading should not obscure a structural tension: services continue to rise at twice the pace of goods, with unregulated services accumulating a monthly increase of 2.9%, feeding inflationary inertia through indexation mechanisms. Consultancies such as Equilibra estimate that, using the updated basket based on the 2017/18 Household Expenditure Survey — whose adoption was halted in February following the resignation of Indec director Marco Lavagna — June inflation would have printed at 2.1%, accumulating 18% in the first half against the 16.8% reported by the official agency.

The data converged with an equally favorable global development: the 0.4% deflation recorded in June in the United States, well beyond the -0.1% expected by consensus, marking the first drop in the U.S. CPI in two years. The result, driven by the collapse in gasoline prices — a consequence of a temporary truce in the Strait of Hormuz conflict that has already begun to unwind — momentarily pushed back the odds of a rate hike by the Federal Reserve and drove the yield on the 10-year U.S. Treasury note toward 4.58%. For Argentina, whose financial program requires that rate to fall toward 4% to cheapen eventual access to international markets, the print was welcome, although the IMF has already warned that the buffers that absorbed the energy shock are nearly exhausted and that any renewed escalation in Hormuz could reignite global inflationary pressures.

Against that backdrop, the central bank posted its largest reserve purchase since December 2022: USD 532 million on Tuesday, in an operation market sources described as a block trade tied to the settlement of corporate Negotiable Obligations. The following day it added another USD 73 million. The 2026 cumulative total already exceeds USD 12 billion across 127 consecutive sessions on the buy side, and gross reserves stand at around USD 48.6 billion, the highest level in nearly seven years. The wholesale dollar closed Wednesday at $1,474.50, sitting 23.8% below the ceiling of the FX band at $1,845, the widest margin since mid-June. Analysts such as Gustavo Ber note that the combination of a stable dollar and record BCRA purchases configures the virtuous cycle the program requires to reach the electoral season with nominal anchors intact.

The third leg of the trident was the auction of the Bonar 2029 (AO29), which drew offers for USD 1.046 billion and allocated USD 470 million at a nominal annual rate of 7.99%, equivalent to an effective rate of 8.29%. The Treasury opted not to exhaust the available cap — up to USD 2 billion — in order to avoid validating higher rates, signaling that its domestic financing strategy prioritizes cost over volume. The bond, which matures in October 2029 — already within the next presidential term — is part of a broader plan of USD 6 billion in domestic placements designed to cover USD 19.2 billion in maturities during 2026. The peso rollover on the same day came in at 183%, with the Merval up 1.9% and JP Morgan's country risk indicator tightening to 404 basis points, barely above the 402 low reached the previous Friday. Leading ADRs on Wall Street advanced, led by Banco Supervielle (+6.2%), Banco Macro (+4.6%), and Grupo Galicia (+3.7%).

Beneath this favorable financial narrative, however, lies a real economy that is not keeping pace. Industrial capacity utilization fell to 58.4% in May, down from 59.9% in April and 58.9% in the same month of 2025, interrupting the recovery process that began in January. Five sectors are operating below 50%: metalworking (38.7%), rubber and plastics (39.6%), textiles (42.2%), tobacco (43.2%), and the auto industry (45.5%). Registered private employment has shed a cumulative 329,667 jobs since November 2023, with eleven consecutive monthly declines, and the number of active companies has fallen to 484,095 — 27,242 fewer than at the start of the current administration. Nearly 70% of companies recorded layoffs in the first half, according to the Bumeran platform, a percentage that doubles the same period of 2025. Labor informality reached 44.2% in the first quarter of 2026. The total basic basket, which defines the poverty line, rose 2.2% in June, above headline inflation, leaving the reference for a typical family at $1,531,472.

On the ground, Granja Tres Arroyos — once the country's largest chicken processor — confirmed a two-week shutdown of its Avex plant in Río Cuarto, affecting 350 workers and paying salaries in installments. Sudamericana de Lácteos, with six months of paralyzed production and 82 employees unpaid, found a new owner in Rosario-based businessman Pablo González, with the aim of resuming operations before the end of July. In the wine industry, exports grew 14.2% by volume in the first half but only 2.6% by value, as the average price per liter fell 10.2%, from USD 3.47 to USD 3.11. The agricultural sector offers a more encouraging counterpoint: the Bolsa de Cereales projects that the soy complex will contribute USD 21.192 billion in exports during the 2025/26 campaign, a 2% year-on-year increase driven by improved international prices, with associated fiscal revenue running 28% above the previous campaign. Cattle ranches are showing revaluations of up to 30