UPDATE 2-Argentina early midterm results show big boost for Milei libertarian overhaul

* Milei aims to increase congressional minority in midterm vote * Success will enable him to continue economic overhaul * Trump has conditioned future support on Milei triumph * Early election results show Milei gaining ground (Recasts headline and story for early election results) By Nicolás Misculin and Leila Miller BUENOS AIRES, Oct 26 (Reuters) – Early results in Argentina's Sunday legislative elections show President Javier Milei gaining ground as voters backed his free-market reforms and deep austerity measures, providing a strong boost for the libertarian leader to continue his economic overhaul. The president's party, La Libertad Avanza, roughly tied with the Peronist opposition in Buenos Aires province, a historic stronghold for Peronsim, according to local media reports. Milei was aiming to boost his small minority in Congress and maintain the support of U.S. President Donald Trump, who recently provided Argentina with a hefty financial bailout but has threatened to pull away if Milei did not do well. Half of Argentina's lower Chamber of Deputies, or 127 seats, as well as a third of the Senate, or 24 seats, were up for election in the midterm vote. The Peronist opposition movement holds the largest minority in both houses, while Milei's relatively new party has only 37 deputies and six senators. The White House and foreign investors have been impressed by the government's ability to significantly reduce monthly inflation – from 12.8% before Milei's inauguration to 2.1% last month – achieve a fiscal surplus, and enact sweeping deregulation measures. But Milei's popularity had fallen in recent months due to public frustration with his cuts to public spending and a corruption scandal tied to his sister, who also serves as his chief of staff. Political experts said that more than 35% of the vote would be a positive outcome for Milei's government and could allow him, through alliances with other parties, to block efforts by opposition lawmakers to overturn his vetoes against laws Milei has said threaten Argentina's fiscal balance. The total results of Sunday's vote have yet to be published. Milei has said he expects a cabinet shake-up after the election that could include members of the centrist PRO party, a frequent ally of the government in Congress led by former president Mauricio Macri. The election will be closely watched by the White House. Trump's potential $40 billion bailout of Argentina includes a signed $20 billion currency swap and a possible $20 billion debt investment facility. Following the results, many analysts predict a devaluation of the peso, which they say has been overvalued to contain inflation. (Report by Nicolás Misculin and Leila Miller; additional reporting by Lucila Sigal, Jorge Otaola and Eliana Raszewski. Editing by Rosalba O'Brien, Nia Williams and Christian Plumb)

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