The mesadinerist veterans of the City of Buenos Aires, tanned combatants of sound exchange and financial crises of the last decades, do not hide their bewilderment before so many mistakes and political noises at a time when The last thing they want to see is that more yellow lights are lit on the command boards of the operations tables. More than anything, because it is a time when the world is playing on the edge of the risco and projects not only a marked deceleration of growth but also possible debt crises in developed markets. Above, Donald Trump’s tariff bazuca does not take respite, but just ask the neighbor Lula. Actually, they recognize in the tables that, the recent movements of the nominal exchange rate should not surprise them, moreover, they were expected, because the real economy data had already warned of a certain correction in sight. But In the midst of the electoral campaign, launched several months ago, the risks of playing with the self -fulfilled prophecies are enormous for stabilitywhich is still in diapers. The “Pas de Deux” between the minister and the pseudo-influencer gave rise to all kinds of versions, speculation, readings, and counterattacks. But In the end, what ends resentful is the mood in making investment decisions.
In one of the main local tables they received intense customer calls about what to do with the positions of “Carry Trade”. There the operators took refuge in four arguments to explain the recent increase of the dollar: On the one hand, the rowed seasonal factor, that is, more circulation of pesos, on the other hand, a mix of electoral uncertainty and falling in the stock of reserves after paying bonists, and some compensation for the recomposition of the withholdings. What all coincide is that the increase of the dollar took place in full “walking” of liquidations of foreign exchange. So it opened the debate of whether the exchange market acts as if there was no stocks. The truth is that the demand for money retreated and the real short -term interest rates were above 10%. In this he enters tertiary, in the opinion of an eighty monetary expert, The impact of the Requiem of the Lefi. But two colleagues also answered him, former BCRA of those years, who should not ignore that now the treasure was playing against competing for the local funding, which will impact not only on interest rates but also on the offer of bank credit.
Will the government sacrifice any disinflation at the expense of gaining reservations?
At that height of the counterpoint, a renowned consultant appeared that unbalance The government seems to sacrifice some disinflation at the cost of gaining reservations. Today they would even be missing just over US $ 3,000 to 3.5 billion to close the year and with treasure purchases of 200 monthly sticks does not arrive. But what they are looking at the tables, and, above all, this old financial public, is that the commitments of 2026 force to rebuild the stock of net reserves. Hence, that they emerge, among these analysts and managers, that It cannot be ruled out that after the mid -term elections the government intensifies reservations, which could impact the exchange rate, sacrificing the deflation to 1% monthly. Today, after all The oven is not to play with the exchange fire. There are no spirits for comedy steps in streamings. I strange see the behavior of officials who know what Pandora’s box is uncovering.
From an important financial bunker from the north zone, which knew how to occupy several floors of an emblematic tower of the Buenos Aires street San Martín warned customers, in a “conference call” out of agenda, which In the coming weeks the market could live with the particularity of having real short -term interest rates of two digits, dollars that do not drop yet with a new real exchange rate level. But, stopping at the onslaught of the “Carrytraders”, the panorama can be complicated in case the market is very positioned on one side of the electoral bet.
Activity level scenarios: Is the rebound exhausted?
The hosts then shared a lunch with two of the main local macroeconomists who provided Activity level scenariosabove all, of private consumption. At the height of coffee, it was already clear that The big question is whether the rebound was exhausted. The problem, or rather, the answer is contaminated by the enormous sector heterogeneity. However, it happens that, according to these experts, there are sectors that had been playing very well, standing out from the rest and explaining the good data of the GDP, which are showing slowdown signs. What they want to see is whether in the coming months the level of general activity breaks the last roofs or not. In this regard, the most curious thing, these economists with broad official and political, local and foreign links point out, is that according to the surveys the expectations of industrialists reflect that they expect a similar or better level of domestic demand. They also commented that The consumption is emitting signals of weakening in recent months, and the real salary fails to lift the head and continues with the water to the neck, Above all, for the issue of services, so, in addition to social heterogeneity, consumer goods suffer.
How could it be otherwise, the political issue abounded in several meetings between investors and the hands of the market, and it was clear that the house prison of Cristina Kirchner broke the original plans of the government forcing it to intensify the onslaught against the caste and do, if there is no choice, a kind of plebiscite of its management in the October elections. A certain crack is perceived among political analysts, a banker complained, because it is not clear if the government can be made of the famous third in the next elections, at least in deputies, in order to have the safeguard of the veto. Yeah A more fragmented congress is glimpsed, and greater radicalization of politics.
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The global “carry” and dollar behavior
In another meeting, A lot about the global “carry trade” and the performance of the actions of the region. A foreign banker explained that Latin America continues to exceed the performance in the year and highlighted the upward feeling, as reflected in the latest survey of Latin American fund managers of the Bofa that confirms that the tickets of global investors to Latin American funds were a key factor so far this year (+U $ 2.9 billion so far this year, compared to -U $ S7 billion in 2024) Local fund exits in Brazil continue due to high interest rates.
On the other hand, said the coin specialist who Net short positions in dollars have decreaseddriven by an increase in long positions, where the dollar has been the G10 currency with better yield so far this month, but it remains the one that has been the worst so far this year while the long net positions in euros have decreased after five weeks of increases, driven by an increase in short positions. In this regard, he caught attention with Yen, where long net positions have begun to decrease again, driven by a decrease in long positions, being the Yen the G10 currency with worse performance last month.
Another colleague contributed that The current dollar behavior is completely different from April, when the markets were surprised by the magnitude of the tariffs and the subsequent climbing with China until a distension was reached in May. According to cross -border positioning data, he explained, a modest rebound has been observed in non -covered positions, indicating that Foreign investors are increasing their dollars in dollarsHowever, there are several caveats: the increase in coverage levels in relation to last year’s average could simply be a reflection of the recent dynamism of asset performance; And if markets really wish to reduce United States exposure to tariff risks or other idiosyncratic factors, for example, prosecutors, changes in April holdings are much more illustrative. Therefore, they believe that they probably see an improvement in cross -border holdings due to the sale of US assets and the elimination of the corresponding coverage.
According to the data of a leading bank there are no indications of a strong asset settlement since the beginning of May. Therefore, they believe that, although April is not repeated, the data continues to show that current dollars in dollars indicate that the strategies of “American exceptionalism” They are not as solid as before, and that current increases in dollars with insufficient reserves continue to exceed the increases in assets prices, which indicates higher general coverage ratios. Of course, this differs, for example, from the fourth quarter of 2024, during which the dollar holdings significantly improved, mainly at the expense of the euro, while other underlying assets also demonstrated resilience. The dollar has corrected down significantly since April, which has helped compensate for fiscal and commercial risk premiums, which would otherwise be reflected in the valuations of the variable income and fixed income. Hence, they project a general period of yield within a rank defined in the underlying assets, which should also limit greater repeal in short -term dollars, but new challenges may arise as the total impact of tariffs, or even only the associated uncertainty, begins to impact the real economy. We will see.
Source: Ambito
