Financial Week: Dollar Bonds Rebound 6%, Central Bank Continues to Sell Reserves

Argentina’s equities and sovereign bonds traded with improvements this week on speculative position redemptions in the face of attractive yields, while the dollar maintained modest appreciation across all bands, with a wholesale market regulated by Central Bank interventions at times of very high inflation.

Regarding stock market assets, Argentine newspapers have successfully gone through a small week due to the carnival holidays, taking into account the strong downward trend in Wall Streetwhere the main the indicators have lost about 3%.

Outstandings went through the rebound in bond prices on the stock market, which focused on the Wednesday and Thursday sessions, with a jump of 11% on Wall Street. In the weekly balance Global increased between 5 and 6 percent.

The climate of optimism was confirmed in the countries at risk prepared by JP Morgan bank, which produces about 100 units within a week to return to 2000 point area basic.

A report of Personal Portfolio Investments which focused on the recovery in sovereign debt prices considered “difficult to attribute the rebound to external factors: the index Bloomberg Emerging Market it remained almost stable this week, maintaining the loss of 2.17% accumulated in February, impacted by the rise in 2- and 10-year rates in the US. Nor is it easy to attribute it to an improvement in fundamentals Argentinians: the BCRA continues to lose reserves, harvest prospects do not improve, inflation is picking up and the January budget result is worrying”.

“The truth is that the rebound coincides with the trip to Washington by officials from Sergio Massa’s economic team. Will they have made progress with the REPO (international bank loan) which aims to shut down the government to strengthen the reserves? We we will find out in the next few days,” they slipped from Personal Portfolio.

“The market is trying to insert a rebound as a respite as the Fed minutes reading did not provide any relevant signals other than traders continuing to pay attention to the treasury rate advance. American after its recent strong momentum”, contributed the economist Gustave Ber.

Argentina’s Minister of Economy, Sergio Massaheld a meeting with the Under Secretary for International Affairs of the United States Department of the Treasury, Jay Shambaughas part of the G20 summit being held in the Indian city of Bangalore.

For his part, the Deputy Minister of Economy, Gabriel Rubinsteinis seeking to close a quarterly review with the International Monetary Fund (IMF) in Washington, to enable a disbursement of $5.4 billion by the agency.

Financial activity was somewhat affected on Thursday by a 24-hour bank strike to demand wage increases ordered by the sector union, at a time when inflation could return to around 100% this year.

“After the backlash generated by the January tax result and in the midst of controversy in the Senate, the Finance team presented the conditions for the second and final call for tenders of the month. On this occasion, it faces total payments that reach 283,500 million pesos, of which we estimate that approximately 74% are in private hands,” said Portfolio Personal Inversiones.

“The operators do not rule out that the government may request approval for a new reprofiling of the bonds to extend the amortizations and avoid the risks of irrecoverability, in an election year”, he declared. Reuters.

index S&P Merval of the Buenos Aires Stock Exchange subtracts in three operating wheels a minimum of 0.2% in pesos, to 248,540 points, while measured in dollars “counted with cash” gained 0.6% Regarding Friday the 17th.

The improvement in the market goes “hand in hand with the main ADRs which have shown greater correlation with external fluctuations which, in recent times, have held the dynamics of emerging markets hostage”, said Gustavo Ber.

The improvement in the local market was seen after the US Federal Reserve (Fed) minutes reported that “almost all participants agreed that it was appropriate to raise the target range for the federal funds interest rate. 25 basis points”.

“Surprises in US data throughout February cast a cautious veil over the optimism that had been generated since last October,” the analysts said. capital balance.

He central bank sold 28 million USD on the wholesale market on Friday and, after buying in the MULC for 7 million USD between Wednesday and Thursday, ended the week with a negative balance of 21 million USDwhile February net sales reached $930 million in the absence of operational two-wheelers.

He the free dollar ended up trading at $379, with an increase of two pesos compared to Friday of the previous week. Currency in the informal market is still two pesos below January’s closing value at $381 to sell. With a wholesale dollar at $195.68, the the exchange difference remained at 93.7 percent.

“In the week just ended, constrained by the Carnival holiday, the wholesale exchange rate rose $2.49 (+1.3%), below the $2.68 increase in the previous week,” he commented. Gustave Quintana, agent of PR Exchange Brokers. In 2023, the official exchange rate is the one that increases the most, 10.5%, against a “blue” dollar which gains 9.5%.

“The BCRA ‘accelerates’ the creeping ankle (controlled devaluation) after slowing for two consecutive months,” commented the financial analyst Salvador Vitelli. “It would seem that there was little point in delaying the exchange rate to use it as a price anchor, and it also makes it difficult to accumulate reserves,” he said.

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