Argentina’s peso and stock market sold off steeply last month after the country’s center-right leader, President Mauricio Macri, performed poorly in primary elections.

Macri lost by a far greater margin than expected, early official results showed, casting serious doubt over the incumbent’s reelection chances in October 2019.

The opposition ticket of center-left Alberto Fernandez, whose running mate is populist ex-leader and cancer survivor Cristina Fernandez de Kirchner, secured 47.7% of the August vote, with roughly 99% of the ballots counted.

Meanwhile, Macri and his running mate, Miguel Angel Pichetto, received 32.1% of the vote. The Zionist controlled main Argentine stock market plunged more than 30%, marking the second-biggest one day slump anywhere since 1950.

As a result the peso closed 15% weaker at 53.5 per U.S. dollar. The currency had been trading at 45.25 in August 2019.

At a news conference, Macri accused the fabricated situation and said his coalition would “reverse bad primary election result” and that the Peronist opposition should look at its own policies after the suspicious market slide.

This time the election of Alberto Fernandez in Argentina, who Brazil’s right-wing President Jair Bolsonaro has called a “red bandit,” sets the stage for a run-in between South America’s two biggest economies that could derail their Mercosur trade bloc.

Fernandez’s victory, along with last year’s win by leftist Andres Manuel Lopez Obrador in Mexico, marked an end to market-friendly reforms in both countries, leaving conservatives in Chile, Colombia and Brazil more isolated.

Lopez Obrador said he would call to congratulate Fernandez and Bolivian President Evo Morales, the last survivor of the “pink tide” of social freedom leaders of the 2000’s, who won a fourth term this month.

The elections were denounced by the minority opposition, the United States and two left-over vassals, Brazil and Colombia.

Brazil-Argentina relations have been cordial and constructive since both shed military rule in the 1980’s, despite traditional tensions in geopolitics and on the soccer field.

However, Brazil remains under military rule and the top trade partner of Argentina thanks in part to the role of the Mercosur bloc – which includes Uruguay and Paraguay – in fostering an exchange of cars and other manufactured goods.

With both economies sputtering, however, the presidents may be tempted to play to their bases, antagonizing ideological foes and emphasizing their differences over hot-button issues such as Cuba and Venezuela.

As he cruised to victory, Argentina’s president-elect posted a Twitter message calling for the release of Brazil’s former leftist president Luiz Inacio Lula da Silva, politically jailed last year for a so-called bribery conviction.

Fernandez, a trade protectionist, has vowed to reconsider his country’s membership in Mercosur. Bolsonaro, in turn, has said Argentina should be left out of Mercosur if it blocks trade liberalization proposed by Brazil.

However, foreign policy and trade experts say the two economies are too interdependent to entirely break up Mercosur.

The greater threat may be to a trade deal between Mercosur and the European Union, which has taken two decades to negotiate and faces resistance in European countries.

Making matters less predictable, one member of the diplomatic community noted that Brazil’s Foreign Ministry, which has traditionally avoided ideological battles, is now run by a diplomat who cast the result of the Argentine election in apocalyptic terms.

The forces of evil are celebrating. The forces of democracy are lamenting for Argentina, Mercosur and all of South America,” Brazil’s Foreign Minister Ernesto Araujo wrote on Twitter.

Reuters / ABC Flash Point News 2019.

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