The country risk pierced 700 points: it fell for the sixth consecutive round and closed at almost six-year lows

He country risk sank this Monday, December 16, drilled 700 basis points and touched its lowest point since February 14, 2019. The sharp drop in the cost of debt occurred after the slowdown in inflation in November and the first quarterly growth of the economy in the era of Javier Milei.

The truth is that the dollar curve stood out, the bonuses they climbed up 2.8%headed by Global 2041followed by Bonar 2030 (+2.2%), the Bonar 2035 (+2%), the Global 2035 and 2038 (+1.8%). Thus, the country risk fell 31 units to 677 basis points and hit the lows of February 14, 2019, during the management of Mauricio Macri.

In that sense, Nicholas Cappellathe sales trade of IEBpointed out that this decline is due to good inflation data, as well as macroeconomic data. “There may be some bonus effect and early reinvestment of the interest to be paid in January. The truth is that with the country risk reaching 700 points, it is increasingly easier to get excited about new debt placements next year for ‘ roll out expirations,” he noted.

“With just a few wheels left until the end of the year, the bond market will continue to pay attention to any principle of agreement between the government and the IMF. In relation to debt in pesos, we will be attentive to the evolution of high-frequency inflation estimates to understand if December will also bring surprises on this front. If so, we see that the long stretch of the fixed rate curve still has the potential for compression, especially given what would be an imminent decline in the ‘crawling peg’ if the goods category of the CPI continues to travel below 2% ( In November the variation was 1.6%). On the other hand, last week we had the last treasury tender of the year and we still have no news about the schedule for 2025,” they analyzed from PPI.

The GDP grew for the first time during Javier Milei’s administration

In the third quarter of 2024, the GDP grew 3.9% seasonally adjusted compared to the previous quarter, according to the latest report from the INDEC, although fell 2.1% year-on-year. Global demand showed quarterly increases in private consumption (+4.6%), public consumption (+0.7%), exports (+3.2%) and gross fixed capital formation (+12.0%), but a year-on-year decrease of 16.8% in the latter stood out.

Global supply fell 4.2% year-on-year due to the fall in GDP and of the imports (-11.7%).

Sectorally, agriculture (+13.2%) and hotels and restaurants (+9.0%) grew, while construction (-14.9%), commerce (-6.1%) and manufacturing (-5. 9%, resulting in a drop of 1 percentage point in the year-on-year GDP figure) recorded declines. “The economy showed quarterly improvements, but the year-on-year decline persists”highlighted from Aurum Valores.

“It is also expected this week, the October EMAEwith mixed signals but a possible monthly recovery. In addition, negotiations with the IMF for a new financing program will be crucial to reinforce reserves and move towards a more flexible exchange rate in 2025,” they added. Cohen.

ADRs and Merval

He S&P Merval rose 7.3% to 2,543,201.91 pointsmeasured in pesos, and in dollars rose 5% to 2,273.44 units, a new historical maximum. This is what he told ScopeIgnacio Sniechowski, head of research at IEB, that “the previous maximum in 2018 was 2,220 points (CCL dollar and adjusted for US inflation).”

Within this framework, the leading actions that advanced the most were: Supervielle Group (+18.8%), Macro Bank (+17.2%), and BBVA (+14.3%).

Among the ADRs that advanced the most are: Supervielle Group (+16.1%), Macro Bank (+15.5%), BBVA Bank (+12.1%), and Galicia Financial Group (+8.9%). It should be noted that both the Bank of America (BOFA) like the Morgan Stanleythey raised the rating of some Argentine companies, which generated “upgrades” for banking entities.