The markets believe that in the next three months inflation will continue at around 7%, after the slowdown in June to 6%. It is not surprising, then, that the Treasury has once again included in its offer for the latest tender for debt in pesos Discount Bills (YOU GIVE), which pay a fixed rate after more than three months in which they had been removed from the menu, seeking to de-index a portion of the new commitments. In that short span, they can yield something more than the inflation-adjusted (CER).
According to estimates from Portfolio Personal Inversiones, the LEDES obtained an effective annual rate of 140% on the first call on Friday. Now the entities that are part of the group of Market Makers will be able to access up to 30% more this Monday in the second round.
Francisco Oddone, investment director of MegaQm funds, stated in a recent meeting with investors that “When you see how the short part of the CER curve is being arbitrated with Treasury fixed-rate assets, the market is putting inflation around 7% into prices until October”. Although Oddone pointed out that there is a risk that it could go back to increases of 8% per month. However, the market seems to give the fixed rate a chance.
As estimated by PPI, in last week’s call, fixed-rate options accounted for 37% of vesting. Of this, 26% would be LEDES and 11% LELITES that took the Common Investment Funds (FCI).
With some liquidity help from public bodies, On Friday, the Treasury managed to roll up the total maturities and raised additional funds for around $120,000 million, exceeding the total maturities since the previous tender, which were around $621,000 million (99% private sector). “At first glance, the Treasury was quite generous in the placement rate of the LEDE. After an absence of several months, the menu once again had the issuance of a fixed rate bill as of October 31,” says Alyc.
In this regard, Gustavo Neffa, director of Research for Traders, believes that “The peso market is quite stabilized since you can see a Treasury that is taking more than it matures.” “We hope that Massa will continue to handle himself on the domestic front in the same way,” says Neffa, who considers that “this will not fail until October.”
monetary assistance
To all this, to the economic team the ability to borrow monetary assistance from the Central Bank is reduced. And it is that with the pesos that he needed to ask Miguel Ángel Pesce to buy yuan and dollars to pay maturities in June and July, the BCRA exhausted almost everything stipulated in the Organic Charter of the highest entity of the financial system.
According to the consultancy Ecolatina, there would have been only $300,000 million left below the threshold. In the year it already has $1.75 billion. Article 20 of the BCRA Organic Charter states that the BCRA may assist with advances to the Treasury for up to 12% of the monetary base or 10% of the Government’s cash resources. It is thought that, as the monetary aggregates move, the margin could be widened in the second half of the year.
Likewise, the Central still has a resource. The profits that it is having from its operation could reach up to $1 billion.
Source: Ambito
