The consulting firm Quantum, headed by economist Daniel Marx, has outlined some possible scenarios for the short and medium term and, based on this, what it is best to invest in.
According to the market data and based on current yields of the Treasury securities, the consultant Quantum, from the economist and recently appointed president of Edenor, Daniel Marx, analyzed what would be the best investment strategy in these assets, considering particularly the dollar linked, which currently have negative yields.
The report hypothesizes that, as long as the Government maintains its plan not to implement a devaluation until the end of the year, The average inflation rate at which it would be indifferent to invest in instruments in pesos or in dollars would be 3.1% per month in a period extending up to June 2025.
Obviously, The work assumes that the current conditions of the economy will be maintained.“Given the current yields on Treasury securities, we wonder what would be the best investment strategy in these assets, particularly considering dollar-linked assets, which currently have negative yields,” Quantum hypothesizes.
How CER and dollar-linked debt are shaping up under current conditions
And the consultancy points out that, “if the deceleration of inflation, the 2% monthly crawl of the official exchange rate and the fiscal surplus are expected to continue, CER and dollar linked debt look relatively expensive with respect to the fixed-rate alternative, especially for positions with relatively short horizons.”
On the contrary, he maintains that “in uIn a scenario where deviations from current patterns are projected, adjustable rate instruments would be preferable to fixed rate instruments.”. They add that, “additionally, the option of assets adjustable by CER (inflation) seems more attractive than dollar-denominated securities.”
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What is the market data?
The Market data reflects that the yield curves to August 21st are as follows:
- lecaps: The average annual yield is around 52% TEA (45% TNA), an average TEM of 3.5% and a curve with a positive slope.
- CER bonds: It has an average real yield of 6% TEA, an average TEM of 0.5% and a curve with a positive slope.
- dollar Linked: curve with negative yields, averaging 5% TEA, an average TEM of -0.5%.
What is the data to take into account going forward?
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Quantum indicates that he made a calculation of the breakeven rates (equilibrium rate) of devaluation of the official exchange rate and inflation for three periods: December 2024, March 2025 and June 2025.
- The rDirect return on an investment in LECAP as of December 2024 is 13.7%a Monthly Effective Rate (TEM) of 3.4%. If the investment horizon were March 2025, the direct return would be 31% (TEM of 3.7%) while by June 2025 it would be 46% (TEM of 3.8%).
- Dollar linked: for what the investor is indifferent between this investment and one in LECAP, the direct devaluation between now and December should be 21% (TEM of 5.1%, an official exchange rate of $1,150). If the deadline were June, the direct devaluation would have to be 32% (TEM of 2.8%, an official exchange rate of $1,254).
- CER: the average monthly breakeven inflation is 3.1%.
The report indicates that “the arbitrage between the different assets in pesos considered would indicate that Investors expect the official exchange rate to rise more than the yield on LECAPs and the 2% monthly crawl guideline maintained by the BCRA.”
“On the other hand, it is observed that The breakeven inflation rate is lower than the median of the participants that make up the REM, which is 3.4% in the period August 2024 and June 2025,” the report said.
Source: Ambito
