Financial day: the dollar rose and dollar bonds fell sharply

Financial market agents took note of the lack of economic definitions in Argentina and began to act accordingly, adjusting prices in all segments. Dollar stock prices rose to record highs and provided upward momentum for the free dollar. Dollar bonds lost ground again, influenced by greater risk aversion abroad, and Argentinian equities also fell.

Several negative factors coincide to sow a certain pessimism or a call for caution among investors. The opening of the Legislative Assembly by President Alberto Fernández gave no indication of the next steps in economic matters, at a time when inflation is accelerating and crosses the three-digit annual mark. The moratorium on pensions for 740,000 retirees without full contributions voted by Congress has increased doubts about a public administration in debt and in deficit.

On the other hand, the need to negotiate a relaxation of the central bank’s targets for increasing net reserves before the International Monetary Fund ignites another alarm signal regarding the solvency of the Treasury. Additionally, February’s collection data, which rose 12 percentage points below inflation, not only exposes the state’s limits to meet election-year spending, but is also the prologue. of a probable drop in GDP this year.

Consequently, the sovereign bonds in dollars lost another 2.4% this Thursday, according to the Globals benchmark on Wall Street. The collapse in emerging market debt prices was widespread after the yield on US Treasuries rose above 4% and returned to the highest level since 2007, but in the case of Argentina, this decline was more pronounced.

Wall Street indices ended with gains of between 0.7% and 1.1%, but the sharp decline in US debt prices increased risk aversion. He countries at risk of Argentina increased by 53 units, the 2,088 dots Bases at 6:10 p.m., after hitting an intraday high of 2,127 integers.

german fermo, strategic advisor to the IEB group (Invest in the Stock Market). observed this Thursday a “punishment of Argentine bonds and of all emerging and non-emerging bonds. The 30-year bankruptcy rate exceeds 4% for the first time since November 2022 and the whole world is “repricing”. Today is external to Argentina and clearly does not help.

“In an international context where nothing favors emerging credit, sovereign bonds are replicating the behavior of their peers”, they have since indicated. Personal Portfolio Investments. “Although emerging bonds fell overseas, the behavior of Argentinian global bonds was particularly difficult.”

“Having 2023 the paradox of being an election year and an IMF-required fiscal adjustment, easing the reserve target does not set a good precedent, as it could be replicated on the fiscal with the same justification of the drought,” they added from portfolio staff.

Leonel Buccolo, accountant at Rava Bursátil, assured that “the local market continues to be affected, dollar bonds have not yet managed to break the downward trend, driven by the international market and a macroeconomic context affected by the lack of reserves “. He added that “variable income is coupled with bonds, in a scenario that will have more and more volatility and a sum of political anticipations that could influence the different instruments. Thus, the Merval in dollars is in the zone of 660 USD with a drop of more than 2%”.

index S&P Merval porteño subtracted 2.7%, to a close of 242,748 pointswhile shares and ADRs of Argentine companies traded in dollars in New York suffered significant losses Grupo Galicia (-7%), Telecom Argentina (-6.9%), Banco Francés (-6.8%)Cresud (-6.6%), Central Puerto (-6.5%) and Banco Macro (-6.2%).

The “blue” price of the dollar advanced two pesos at the close of the parallel market, $377 for sale. The bill traded in the informal segment maintains a rise of 31 pesos or 9% so far in 2023. With the wholesale dollar advancing 30 cents, to $197.87, the exchange rate gap is is stabilized at 90.5%.

The jump in the free dollar was linked to rising stock prices, given the negative sentiment in the stock market, more currency hedging was seen. The “cash with liquidation” came to trade above $373 via the Global 2030 (GD30C), an all-time high, while the MEP dollar with the Bonar 2030 (AL30D) broke above 363 pesos. At the close, they marked $370.32 and $362.04 respectively.

The central bank bought this Thursday a low figure of 4 million dollarsin a wholesale market whose spot volume fell by around $100 million from the previous session to $375.3 million.

BCRA reports net sales of USD 36 million in March in MULC and comes from February net sales For $878 million, an all-time high for the second month of the year, due to the drop in agricultural sales due to the drought. During the year 2023, the negative balance of the Central in the MULC reaches 1,106 million dollars.

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