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Argentina's Fernandez names transition team as markets seek relief

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Argentina's Fernandez names transition team as markets seek relief
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By Nicolás Misculin

BUENOSAIRES (Reuters) – Argentina’s president-elect Alberto Fernandez has appointed a small transition team until his government takes over in December, a spokesman said on Tuesday, but there were no economists in the group as financial markets watch for signs of how he will steer South America’s No.2 economy.

The moderate Peronist, who won an election victory on Sunday, has appointed a four-person team of confidante Santiago Cafiero, “Kirchnerist” Eduardo de Pedro, former justice minister Gustavo Beliz and former senator Vilma Ibarra to negotiate the transfer of power with defeated incumbent Mauricio Macri’s team.

The group does not include any economists, leaving up in the air the key question investors are asking, which is who will lead Fernandez’s economic team as the country’s grapples with currency and debt crises.

Fernandez and Macri met on Monday to discuss a transition of power as Fernandez looks set to take Argentina in a new direction to the business-friendly reform agenda espoused by Macri, a staid former magnate with close ties with the United States.

Markets are closely watching for signals from Fernandez about how closely he will work with Macri to smooth what has potential to be a tricky transition until the new government starts on Dec. 10.

“The only way to release market tension is to give a confidence boost with a credible economic team and a preventive plan for negotiations with the IMF,” said Siobhan Morden, managing director of Amherst Pierpont Securities.

Argentine media has reported that Cafiero could be in line to be the Cabinet chief, while Pedro is a potential interior minister.

Argentina’s sovereign dollar bonds came under pressure earlier on Tuesday, with the benchmark international 2028 dollar bond <040114HQ6=> down 1.1 cents to 37.1 cents in the dollar, while the 2023 issue <040114HP8=> slipped 0.9 cents to 39.36 cents in the dollar, according to Refinitiv data.

Fernandez rode back to power as the electorate voted to ditch the economic liberalisation and austerity of conservative Macri, with the economy on the cusp of a complex $100 billion debt restructuring.

The opposition election win is seen with some trepidation by markets, which still recall more interventionist policies under Fernandez’s running mate, ex-president Cristina Fernandez de Kirchner, who ran the country between 2007-2015.

(Reporting by Nicolas Misculin; Additional reporting by Cassandra Garrison; Writing by Adam Jourdan; Editing by Alistair Bell)

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