BUENOS AIRES, May 28 (Reuters) - Argentina's financial

markets dipped on Tuesday after libertarian President Javier

Milei, traveling on a U.S. tech tour, shook up his Cabinet,

firing his chief of staff and bringing on board the architect of

his government's key economic reform package.

The financial markets, which have rallied hard since Milei

took office in December, saw bonds dip around 1% and the S&P

Merval stock index lose around 1.5%, as investors

digested the first major government overhaul.

On Monday night, Milei fired his Cabinet chief Nicolas Posse

and replaced him with current Interior Minister Guillermo

Francos, seen as a more outgoing and aggressive deal maker,

which is key as Milei's main reform package faces a hold-up in

Congress.

"Francos' appointment is a very welcome political opening,

he's strong on dialogue, something Posse lacked," a private

financial trader at local bank Macro said on Tuesday, citing the

need for results on Milei's reforms to boost sentiment.

"The market needs laws to come out to begin deregulating the

economy once and for all."

Milei will also bring economist Federico Sturzenegger into a

new ministry focused on economic deregulation, new Cabinet chief

Francos announced at a press conference, a move to try to

bolster the reform package currently heading to the Senate.

Argentine political analyst Juan Mayol said the appointment

of Francos was a bold step for Milei, an economist and former TV

pundit with little political experience who won a shock election

last year pledging to slash state over-spending to overturn a

deep fiscal deficit and bring down triple-digit inflation.

"He is a complementary opposite to Milei," Mayol said, a

reference to Francos' political savvy versus Milei's

showmanship. Milei recently sang in a rock concert, and he has

traveled regularly overseas and built ties with global figures

like billionaire Elon Musk.

In radio comments, Francos said he had been tasked with

handling the political juggling act needed for the government to

push laws through, a challenge as Milei only controls a small

minority in Congress and relies on winning over allies.

"The president does not have an easy relationship with

politics because he does not understand politicians," Francos

said, a nod to Milei's regular criticism of the political elite.

"He sought in me someone to facilitate that dialogue, and

now he is looking for that conjunction of tasks and he entrusted

me with that responsibility and I hope to carry it forward."