Argentina’s unemployment rate was 7.5% in the fourth quarter, up from 6.6% in the previous quarter.
This is an increase of 0.9 percentage points quarter on quarter.
The Q4 2025 unemployment number, jumping to 7.5% from 6.6%, is a clear signal of economic weakness. This data suggests the labor market is struggling more than anticipated, likely leading to reduced consumer spending. We see this as a pivot point, challenging the modest optimism we held at the end of last year.
Given this weakness, we should anticipate further pressure on the Argentine Peso. Derivative strategies should favor long USD/ARS positions, perhaps using forward contracts or call options on the currency pair. The central bank’s efforts to drain liquidity, which we saw them attempt again in February 2026, might not be enough to counter this negative sentiment.
For the Merval index, this news warrants a bearish stance. We should consider buying put options on the index or on major financial and consumer-focused stocks that will be hit hardest. Looking back at similar situations, like the economic turmoil we observed in 2023-2024, rising unemployment often preceded sharp equity market corrections.
This report will almost certainly increase market volatility. Implied volatility on Merval options, which was already trending up at around 65% last week, is likely to spike higher. Establishing long volatility positions, such as straddles on the index, could be profitable regardless of the market’s exact direction in the immediate term.
The central bank is now in a difficult position, caught between fighting inflation and stimulating a weakening job market. With monthly inflation still stubbornly high, reported at 6.1% for February 2026, they have little room to cut interest rates to boost employment. This policy gridlock only adds to the uncertainty, reinforcing our bearish outlook on Argentine assets.
Start trading now – Click here to create your real VT Markets account
