Argentine primaries on Sunday will offer investors a stark reality check.

While the election only defines which candidates will represent each coalition, they also serve as a giant opinion poll ahead of October’s presidential vote.

Should market-friendly President Mauricio Macri do well, asset prices could boom. Should he do badly and rival Alberto Fernandez takes a seemingly unassailable lead, markets could plummet. It’s all a question of margins.

“The widely accepted view is that markets will tolerate a 5% disadvantage for President Macri” on expectations that renewed growth will help him revert the deficit, Siobhan Morden, head of fixed income strategy for Latin America at Amherst Pierpont Securities, said in a client report.

Here are some of the scenarios.

Should Fernandez win by a 4 to 7-percentage-point margin, the central bank will continue its current balancing act — defending the peso with high real interest rates, while trying not to stifle the incipient economic recovery.

“The spreads of foreign-law dollar bonds will again trade between 900-950 basis points,” compared with 886 at present, said TPCG‘s chief economist, Juan Manuel Pazos. “The ARS will perform in line with its emerging market peers and the central bank will probably be able to continue selling futures to keep the FX anchored.”

Less than 4 points: Rally

A narrow difference in favor of Fernandez could trigger a rally on speculation that renewed economic growth will enable Macri to revert the gap.

“Considering this starting point, Macri would be adding the 5-6 points from undecided voters,” according to Ezequiel Zambaglione, head of strategy at Balanz Capital Valores in Buenos Aires. That’s possible if “there is a positive dynamic in the foreign exchange market and confidence in the government increases.”

Zambaglione sees the spread at 800 basis points under this scenario. But if the elections show a tie between Macri and Fernandez or even a Macri win, that difference could fall to 700 basis points and beyond.

The ARS would initially rally about 4%, and then broadly stabilize in nominal terms, while continuing to strengthen in real terms, Citigroup analysts led by Fernando Diaz wrote in a client report.

More Than 6 points: Slump

“A shortfall of more than 6-7 percentage points relative to Mr. Fernandez could prove an insurmountable obstacle, especially in a highly divisive and polarized political environment,” Goldman Sachs analysts led by Alberto Ramos said in a recent report. “The likely negative market reaction in that scenario would certainly complicate the president’s task.”

TPCG estimates that the yield spread could soar to more than 1,500 basis points in this case.

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