There is no longer talk of V or W or anything similar. The press with the dollar and the rate without stocks. Only after October there is consensus that the government emphasizes the bands. The “imputation of Menger” vs the “pass-through”.
So you can hear and comment on the financial market, The current economic program, even among liberal and orthodox referents, is of less and less adherents. This does not mean that the results achieved are not recognizedwhich according to the heat of the pink until they surprised their own and others. Having traveled all this time, with a fierce adjustmentabove all, in retirement and pensions, public works and transfers to the provinces, without any social outbreak, it is undoubtedly an achievement. As it is, the Inflationary deceleration and have raffled a possible hyperinflation. All anchored in the fulfillment of the fiscal surplus, in addition to the gadgets with the capitalizable interests. In the words of a respected economist and former official, the government received a patient in intensive therapy and already passed it to the recovery room, but now They remain to make several adjustments to be a normal country again. Meanwhile, at the tables they celebrate the opportunities window to resume the “Carry Trade”, because the data that brought the “Staff Report” of the IMF does not excite bets on sovereign bonds in dollars. Why?
The answer was in a “Call Conference” that armed an active manager who moved from the City to the Conurbano. There they explained the CFA analysts (“Chartered Financial Analyst”, International Cuarda for Financial Professionals) of the manager who: in addition to the IMF reduced the goal of accumulation of reserves, and although the accumulation of reserves is the main “driver” of short term for the bonds as confirmed by its performance since the treasure began to buy dollars, the immediate It has, how many buys as seen in the last weeks given the synthetic rates in short -term dollars taken as proxy of the cost incurred by the treasure in buying foreign currency. So that there is less pressure on the dollar by the treasure in the coming months (the review of the IMF of September was eliminated) in a period of increase in demand by the private sector for higher level of activity and lower supply of agriculture may be compensated by the perspective of lower net reserves. So, They do not believe that the results and changes established in the “Staff Report” can modify the trend of dollars in dollars for the coming weeks, from there, that customers advised to position themselves in letters in short -term pesos rather than in Hard Dollar bonds. One participant recognized the high yields that can be obtained, at least, to the elections, with such real interest rates in pesos.
The press with the dollar and the rate without stocks
A counterpoint between financiers during a dinner at Las Lomas gave way to a balance of the latest turbulence. On the one hand, the host, head of “Call Money” in a private bank, said Already with more than three weeks without the Lefionce again, every time something of the economic program stopped working, instead of colliding in front, the government found the way to turn and suture the problem, adapting the narrative without paying costs. However, he warned that the elimination of the liquidity instrument of the banks injected more volatility into a scheme that already began to operate with positive real rates and He detonated a disturbing triad: an increase in treasure debt, a new escalation in interest rates and a concentration of dangerous maturity.
DOLLAR BCRA INTERVENTION RESERVES
On the dollar, the desserts stressed that the rise in July (15%) was accompanied by the futures curve when economy-bucra let it run, so it is believed that even the elections will maintain the current band scheme, and Only after October there is consensus that the government emphasizes. At the time of whiskey three questions emerged, beyond The press with the dollar and the rate without stocksthat fired different responses, according to the level of optimism: How the “Pass Through” follows; how imports that are already at 6,000/7,000 monthly sticks and tourism spending will react; And in relation to this, what happens to the treasurement and how much it will stop to the banks.
To loosen the atmosphere and bring some light, one of the diners, an economist of a foreign bank, threw on the table the last comment of the “great teacher” Gaba about the efficiency of exchange policy. According to the “teacher” in July, the official exchange rate rose 13.6% with a small impact on the CPI that would increase about 2%, that is, the “pass This Experience shows that It would be possible to correct the over-value of the weight without losing the control of inflation given the new framework of the economic policy that has as its axis the tax surplus and contractive monetary policy. We will see.
Menger’s “Imputation” (Official Argument) vs the “Pass-Through”
In a zoom they discussed the political situation for the elections, where they highlighted the unconditional surrender of the Pro Caba to the libertarian hands and about the surrender in the province of Buenos Aires said that in reality much was not negotiated because, simply, the voters of the PRO or they already went to the or will vote mostly by the violet ballot, so Mauricio Macri did not come out as he thought, or rather, they said ironically he will have made it appropriate to focus on FIFA. We will see. The truth is that the political key to the ruling is that the result of the next elections manages to consolidate one third in one of the two legislative chambers, it is more likely that it is in deputies, because, as a political analyst remembered sadly, a deputy is cheaper than a governor. The third is key for Milei to continue ruling his style, via DNU and veto, because with a camera that approves it they cannot turn it to.
There was also talk of Menger. Because they consider that weight depreciation is not bad news if nominal depreciation only adjusts the real exchange rate and does not accelerate inflation. For now, They believe that Julio looks encouraging, but since half of the rise was in the last 2 days of the month, only in August it will begin to be evaluated if the inflation regime really changed. An academic contributed the data that, during the last 15 years, much of consumer prices can be explained with a simple 70% salaries and 30% devaluation, something that would give zone 3% in July and August, if the dollar continues around $ 1,350. But if the Julio-August IPC gives more than 2% than 3%, then it means that the demand does not validate that the cost increases are transferred to prices and Menger’s “Imputation” (official argument) will be winning the first round to “Pass-Through”.
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There is consensus that the lack of a monetary program generates more uncertainty about the course and action of the BCRA. In this regard, the BCRA paid repo until last Friday, but this Monday and Tuesday no. An old waiter explained that between the middle of last month and early August the BCRA was a policyholder in 8 of the 15 wheels, without a daily frequency monetary goal that explains when it intervenes and when not. About the “Carry Trade” explained that the return in dollars in Boncap is 4.5% in mid -February if the dollar is on the roof at that time, but the closer it is from the band, the less credible it is, if the BCRA wants to continue accumulating reserves. About the activity level No one expects a strong recovery, there is no longer talk of V or W or anything similar, but of a simple “square root”, the level of activity will remain, in the best case, so for the coming months.
Source: Ambito
