The market entered “pause mode” and gave the Government a day of truce


Yesterday’s financial wheel began with bad omens. Debt bonds opened sharply lower and country risk threatened to break through the 3,000 basis point ceiling. The price of liquefied gas also traded very high with increases close to 10%.

Fortunately for Argentina, both factors moderated. Gas ended with a rise of just under 4% that will affect the future, and the country risk, after the recovery of the main debt bonds, yielded 16 units (-0.5%) and closed at 2,927 basic points.

The cost of energy is wreaking havoc on the economy and all the windows to make dollars have been closed. The IDB, dominated by the United States, which has 30% of the shares, denied new financing to the country at the same time that USD 100 million in energy imports were lost.

By cutting dollars from importers, in the wholesale market where the dollar rose 63 cents to $130.40, the Central Bank was able to buy USD 55 million which raised reserves by 45 million to USD 39,759 million.

The funny thing is that the market took misfortune as an opportunity and He believes that in the next few days the Government could change its mind and give producers a waiver so that they can pay off the remainder of the harvest.

“There is a tense calm in the market. A truce was given to the Government while waiting for news”, said the financial analyst Franco Tealdi which attributed the recovery of Argentine bonds to foreign factors and not to internal ones.

“Another example of the market’s truce is that the dollars that had fallen on Friday today operated stable”, he added.

Cash settlement transactions against bonds continue to be non-existent because companies that have surplus Cedears – certificates of holdings of stocks, bonds, or EFT’s that are listed on the New York Stock Exchange – are selling the surpluses because they can only have a maximum of USD 100,000 if they want to maintain access to the Single Free Exchange Market (MULC).

hence that the amount of trades against GD30, the bond used for these operations was a quarter of the usual. The title, despite the lower demand, rose 2.14% and the dollar traded at $325.99, just 45 cents above Friday. When it came to operations against shares, the cash with liquidation closed at $329.39. But there is a segment where it is compensated by the Euroclear, where the prices do not appear on the screen.

The MEP dollar traded through the LA30 (+1.10%) saw a more significant rise of $4.22 (+1.3%) to $319.72 but is still far from Thursday’s record high of $326.09.

Going down to the “blue” was not a big problem. With a handful of dollars, the friendly hands of the Government increased the offer and the currency fell to $318 but then cut losses and closed at $322, a drop of $16 compared to Friday.

bonuses pegged dollaradjusted by the price of the official, adjusted downwards and after the strong rises on Friday they fell to 0.70%. The same thing happened with indexed titles.

The stock market had a positive wheel. With business for double the usual amount, $2,392 million, the S&P Merval, the leading stock index, rose no less than 4.96%. YPF (+7.82%) and crest (+7.28%) were the best of the wheel due to the increase in oil prices and the possibility that the exchange rate for agriculture would improve.

The ADR’s or Cedears, operated an important amount of $5,970 million. The best of this wheel passed by YPF (+7.7%), center port (+6.6%) and crest (+6.4%).

The end of the month is coming and many companies are parting with the dollar is to meet expensesbut they also await the result of the meeting of the Open Market Committee of the Federal Reserve that begins today and will end tomorrow, where they will define the increase in US interest rates. The market is divided between those who believe it will be 0.75% and those who think it will be 1 point. In any case, in share prices the rise is discounted. The problem is that the Dallas Federal Reserve’s prediction of a week ago, which warned that Argentina and Turkey will not be able to withstand another rate hike in the United States, is up in the air.

When rates rise, the world suffers, particularly the emerging countries because they see their foreign currency income restricted. The better yields of US rates strengthen the dollar and the main victims are debt bonds and exchange rates.


Harsh warning from international banks for Argentina’s debt: “The markets have already given up”
Carlos Melconian: “The acceleration of deterioration awaits us; we will have to see if it is explosive or not”
With harsh criticism, the president of the IDB said that he cannot approve new financing for Argentina
The BCRA bought USD 55 million in the market, but maintains a strong negative balance in the month

Leave a Comment