After Sunday’s elections that revealed that there will be runoff between Sergio Massa of Unión por la Patria and Javier Milei of La Libertad Avanza the thing is the future dollar collapsed on the Matba-Rofex and expectations of a sudden exchange rate jump were greatly diluted. This day, although the trend continues, with the largest drop for April, December contracts rose again.
Currency prices in this market had spiraled very strongly in recent weeks prior to the elections, driven by the possibility that Javier Milei will forcefully prevail at the polls and gain strength in his dollarization of the economy. During the previous week, The Government had intervened along the entire curve to moderate devaluation expectations.
Finally, On Monday contracts fell by almost 30% before the victory of UP by more than 6 points compared to LLA. This day the contract that drops the most is April (-11.9%) and stands at $960followed by May (-8.7%) to $1,050. However, In December there is a 3% increase to $613. It should be noted that on Monday this contract had collapsed 27.4%, up to $592.
“The movements in the futures curve reflect that with the ruling party in the runoff a devaluation became highly unlikely until 11/19. Secondly, the chances of dollarization were reduced given Massa’s advantage, and thirdly, a quick exit from the stocks became less likely as of 10/12, since Massa represents the status quo,” they indicated in their PPI report.
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