- Sunday's primary election ballot is seen as a key gauge for the first round of Argentina's presidential elections in late October.
- The question for investors ahead of the vote, according to Abhijit Surya, country analyst at the Economist Intelligence Unit (EIU), is how big the voter margin will be between Macri and Fernandez.
- External observers view the primaries as a referendum on Macri's painful economic reforms.
Voters in South America's second-largest country are preparing to go to the polls, with international investors bracing for a fresh bout of volatility in financial markets.
Sunday's primary election ballot is seen as a key gauge for the first round of Argentina's presidential elections in late October.
If no one candidate secures a big enough win in the first round on October 27, then the election is expected to go to a late November run-off between center-right incumbent President Mauricio Macri, and the opposition ticket of center-left Alberto Fernandez supported by populist ex-leader Cristina Fernandez de Kirchner.
The leading candidates are seen contesting a tight race over the coming months, although Fernandez is expected to come out on top in the symbolic primaries.
Voters will choose among 10 presidential candidates on Sunday, though the main political parties have already established their leaders, making the primaries — known as the PASO — a nationwide poll on how the political rivals are faring less than 80 days before the first round of the presidential vote.
The primary covers candidates for president, some provincial governors and national legislators.
"The primaries (PASO) are a very accurate indication of what will happen on 27 October," Carla Selman, senior Latin America analyst at IHS Markit, told CNBC via email on Friday.
"Although they were originally meant to choose the candidates that would run for the elections, since no president-vice president ticket is facing internal competition it's more like a 'dress rehearsal' for the October elections," Selman said.
The question for investors ahead of the vote, according to Abhijit Surya, country analyst at the Economist Intelligence Unit (EIU), is how big the voter margin will be between Macri and Fernandez.
A voter margin of more than 5% in favor of Fernandez — or if the populist-leaning opposite candidate secured close to 45% of the total vote — would be worrying for market participants, Surya said.
It would also most likely trigger volatile moves in currency markets, with many in the country "super-sensitive" to any shift in the Argentine peso.
In Argentina, presidential candidates will avoid a second run-off vote in November if they reach 45% of the vote in the first round in October, of if they get 40% with a 10-point lead over second place.
Argentina's central bank has been given greater leeway to intervene in currency markets in recent months, in order to prevent dramatic swings in the peso's value.
The EIU's Surya said the tools at the central bank's disposal should mean it has "significant firepower" to prevent another crisis.
But, he warned some movement in currency markets would be "unavoidable" after Sunday's primaries, with a better-than-expected result for Fernandez likely to trigger downward pressure.
External observers view the primaries as a referendum on Macri's painful economic reforms. The business-friendly incumbent has said he plans to continue with the same austerity-driven path if re-elected.
Meanwhile, Fernandez and his running mate, ex-President Cristina Fernandez de Kirchner, are less favored by financial markets, with investors concerned they could reverse recent improvements to the country's fiscal deficit.
Fernandez has sought to reassure market participants in recent weeks, saying he would not intervene heavily if elected president later this year.
However, the moderate candidate has previously said he plans to bring down interest rates to help pay pensions, weaken the Argentine peso and has also reportedly attacked the International Monetary Fund (IMF).
"Cristina Fernandez (de Kirchner) doesn't have a great track record when it comes to macroeconomic management so investors will be much more wary of an Alberto Fernandez administration — particularly the extent to which Cristina Fernandez is the power behind the throne," the EIU's Surya said.
— Reuters contributed to this report.