The surprisingly large loss by Argentina's President Mauricio Macri in Sunday's primary election to the left-wing candidate Alberto Fernandez calls into question the future of the IMF programme and, in our view, increases the risk of debt default.

We believe Fernandez will engage with the IMF, as the alternative would be too costly for the Argentine economy. However, we expect the pressure on the ARS to persist and we cannot rule out a debt restructuring.

In our opinion, the contagion from Argentina to other emerging markets will be limited (unless it defaults on its debt) due to the relatively small size of the Argentine economy and easing mode of the Fed and ECB.

In general, emerging markets are driven more by trade war issues, the state of the global economy and the monetary policy stances of the Fed and other big central banks.

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