Dollar bonds fall again and already rack up a 12% loss in February

In recent trading cycles, dollar bonds halted the significant recovery process they had been showing over the past few months. If el foco se pone en los títulos restructureados, que salieron a cotizar al mercado en septiembre de 2020, la apuesta inversora había reflejado una ganancia en une rang de 70% al 80% en dólares desde el tramo final de octubre hasta fines de enero de This year.

Undoubtedly, the recent boost in sovereign debt went hand in hand with the plan to buy back the debt by the Treasury, announced by the Minister Sergio Massa January 18. On February 2, global bonds on Wall Street reached their best prices of the year, when accumulated an average improvement of 24% compared to the end of 2022 and JP Morgan’s country risk was below 1,800 basis points.

However, this improvement was beginning to set a hard limit to cross due to the macroeconomic conditions in Argentina: activity that weakened month by month, inflation that increased and reserves in the coffers of the Central Bank that fell.

For this reason, the The February balance is negative at the moment. The bone foreign exchange bonds lose 11.6% so far this month and the the country risk has once again crossed the ceiling of 2,000 points fundamentals, a prohibitive threshold for issuing debt on international markets.

Dollar sovereign bonds have posted losses in recent sessions, “extending their negative streak after the inflation news in January, as investors closely monitor this variable, international reserves and the fiscal deficit in a year of political uncertainty for the presidential elections”, estimated the analysts of Search for merchants.

In any case, it should be noted that the restructured public securities, in dollars of Argentine and foreign law, maintain a 4% increase in 2023even when the outlook for the election year remains uncertain.

A report of IEB Group (Investing in the Stock Exchange) underlined that “a conjunction of political and economic events is beginning to shape an increasingly complex macroeconomic scenario: the decline in inflows and the level of activity, the acceleration of inflation and the constant drain on the BCRA’s reserves by the sales in the added MULC lead to a more volatile environment which is directly reflected in the market for fixed income securities – mainly sovereigns in dollars – and variable income securities”.

Massa announced in January the purchase of foreign debt for more than 1,000 million dollars due to the “window of opportunity” represented by the drop in country risk, and the possibility of accessing the debt market through l national state and the private sector.

“The bond market is taking a break in the upside, this can infect the stock market, we are in a dead end market. Long term, we are bullish on bonds and equities, maybe the downside is a good time to buy. You have to be patient, the markets are preparing a rally bullish for May or June when the presidential candidacies are known, we have provincial elections with tangible results and the map of the path to the presidential election begins to take shape,” said the analyst and business adviser Salvador DiStefano.

The improvement in dollar bonds is subject to local macroeconomic weakness, but also to foreign financial volatility

The analysts of Personal Portfolio Investments They pointed out that “Argentina’s dollar debt performance is largely explained by the foreign component. The emerging universe, of which Argentina is a part, continues to suffer the consequences of fears that the Federal Reserve will keep rates on a trajectory higher longer, And he can’t lift his head. In February, the Bloomberg Emerging Markets Index it is already down 1.86%, and January inflation data from the US yesterday only deepened the trend”.

“It is still too early to know what decision the Federal Reserve will take regarding the next rate hike in March, so we will have to follow closely until comments from its leaders and the next economic data releases,” they said. they bounded. of the personal portfolio.

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