Sergio Massa of Union for the Homeland recognized that Javier Milei prevailed in the runoff and with this a new chapter opens in Argentine history. The speech of the new president-elect will be key and what he will say in the next few hours about what the transition will be like. What will happen with the blue dollar, official dollar and the stock market. The keys to understanding the coming days in this note.
At this time the first indicator to know what could happen in the markets is the Bitcoin dollar or dollar that It rose 20% and reached $1,200according to the average among local exchanges reported by Coinmonitor. After the winner’s speech was announced, the price moderated its rise and is currently up 5.2% to $1,045.73.
First repercussions after Javier Milei’s victory
The Economist Federico Glusten in dialogue with Ámbito expressed: “He crypto dollar It surpassed $1,200, something similar is happening with the MEP dollar of Cocos Capital. With which we can say that a process is taking place where “The market is already pricing what is going to come, which is a notable increase in the price in the face of eventual dollarization.”
“The second thing that we will have to see what is going to happen is with the issue of Central Bank communications and the price of the official dollar, if the MEP dollar will continue to be artificially supported and the official dollar will continue to be very cheap. I think not, because Therefore, if you leave it free, we will have to see how it opens on Tuesday, which is the first business day.. I think it will give a very strong rise of the officer“is leaving the market free,” he expanded and predicted an increase of 100%and he said that he imagines an opening of up to 40% in financial exchange rates.
As for the S&P Merval said there could be a mixsome banks and companies linked to public works can fall hardwhile importers and technology They can have a strong increase. “We will have to focus on YPF, Banco Macro, Pampa Energía since they were projecting a strong increase in profits due to the programmed investments,” said Glustein. As for the bonusesassured that it will be key what is said about how the paid liabilities and the Leliq barrage will be dismantled.
In turn, the economist Amilcar Collante had anticipated that “if President Milei is confirmed for the orderly transition The role of Leonardo Madcur, Chief Advisor of the Ministry of Economy, will be key. It is likely that Javier Milei’s team will ask him any rate adjustment between 11/21 and 12/10 at least reverse the tariff arrears of the last 120 days”.
For its part, Gustavo Neffadirector of Research for Traders and Fin.Guru. opined “the dollar flies to start. Many things that are hidden under the carpet will be revealed. It’s time to start repairing the damage.” From Romano Group, Alfredo Romano maintained: “The axis of any stabilization program It comes for immediate fiscal correction. Therefore it will be very important send strong signals in that sense“.
Moderate Milei or aggressive Milei?
For the consulting firm Romano Groupif the market is not happy with Javier Milei’s plan there could be a very high exchange rate ($1,000-1,200, very high in real historical terms).
“It is important to highlight that without a doubt we believe that the economic proposal as a whole will be a shock and there will be no fiscal or monetary gradualism. The exit from the exchange rate could be imminent and despite the fact that Economy Minister Sergio Massa wants to avoid devaluation, we believe that the market will twist his arm. Possibly, the gap could reach levels greater than 200% if the BCRA does not decide to devalue on the day after the ballot,” they expressed.
Refering to 1816 consultant on dollarization They said: “The market is not entirely convinced that it would move forward with such a plan, basically because the net reserves are US$10.5 billion, the liabilities in Pesos from the BCRA to the current CCL are US$37.5 billion and the country lacks financing. “It only seems feasible to dollarize at a ridiculously high FX, even higher than the FX at which Ecuador dollarized (a TCR greater than double the historical record).”
“Dollarize with an FX so high that it implies probable hyperinflation during the transition to the new regime. Banks would suffer considerable losses for their bonds in pesos (dollarization involves converting securities in pesos that are quoted at parities of 90% into securities in dollars that are quoted at 30% and today public securities ex Leliq represent more than 60% of the net assets of private banks), and the risk of bank runs would increase due to the consolidation of reserve requirements in dollars and pesos (today banks have availability in dollars for US$13.8 billion, including reserve requirements)”, they expanded.
In Delphos They also projected that “if the emphasis on dollarization or ‘currency competition’ continues without further clarification in the short term, We could return to the CCL highs, with greater turbulence for assets in pesos. “The appointment of the economy minister will also be awaited with great attention.”
In turn, a stock broker, PPIin its analysis sent to its clients, specified that, in the case of a moderate Milei, they see the CCL rising 5/10% due to greater uncertainty.
“If Milei ratifies dollarization and the closure of the Central Bankwhich would imply ignoring the alleged governance agreements with the PRO, the CCL would gain greater momentum. Although it is not clear that the market will completely believe the implementation of the proposal and assimilate it to the electoral effervescence, the CCL could climb to the highs of 10/20 ($1,090 today), when dollarization was the base scenario . It would be an increase of 24%“, they explained from PPI.
And they expanded: “If the libertarian insists on the proposal in the following days and even presents the dollarization team, the CCL could have no roof“.
FMyA pointed out that “with a victory for Milei we see a Tuesday of uncertainty on the market, and until December 10 we hope a more overheated parallel dollar, until there is more certainty about its dollarization plan, and more demand for hedging papers (Dollar Link; ROFEX and even Merval). In FMyA They projected an official dollar “unified in December at levels of $800, at least.”
Source: Ambito
