At the local level, the Government is maintaining its economic agenda and is putting behind it the legislative setback it received last week. In the financial markets, optimism continues to reign in the main assets.
In a new month, the The market starts the week after a setback by the Javier Milei Government in legislative matters that forced him to exercise the veto to prevent an increase in pensions for retirees, something that goes against, from their perspective, meeting the fiscal deficit target.
At the same time, the city remains optimistic about good profit prospects in the face of economic readjustments in some specific sectors, but political tension continues to make investors cautious. In this context, here are the data to be closely followed this week, both locally and internationally:
Reduction of the PAIS Tax
Starting this Monday, the PAIS tax will be reduced by 10 percentage points to 7.5%, with which the Government hopes that the prices of the products with imported components start to go down, what will help slow inflation in September. There will also be an impact on tax revenues, but it is expected to be offset by the Income Tax, money laundering, the moratorium and some recovery in economic activity. And a increased demand for foreign currency in the exchange market, something that could make it difficult for the BCRA to add reserves through intervention.
Money laundering
Money laundering will also begin to gain relevance in the market, given that phase 1 ends on September 30, in which, for regularizing assets of more than US$100,000 and that are not invested, only a 5% penalty is paid. It is believed that The bulk of the money will come in during this month, something that will have a direct effect on the gross reserves of the BCRA. The market also expects there to be a bullish momentum of money laundering on Argentine stocks and bonds. Analysts expect that around US$20 billion will enter the system by March 31.
Inflation
This Friday, the inflation data for August in CABA will be released, which will provide clues about the national CPI that will be released on September 11.
Fed rate cut
With a start to the week without activity due to the holiday Labor Day, All eyes on Wall Street will be on the monthly employment report next Friday, awaiting this month’s Federal Reserve meeting and a possible rate cut for the first time in several years.
Fed Chairman Jerome Powell had admitted last month that it is time to begin to reduce interest rates, and the first adjustment is expected to be 25 basis points during the meeting on 17-18 September. However, any sign of a slowdown significant weakening in the labor market could reactivate the concerns about a possible recessionwhich unsettled markets in late July and early August, which could lead to more aggressive rate cuts.
Central Bank Reports
The Central Bank will announce this Thursday the REM (Market Expectations Survey), a key report that takes into account the expectations of consulting firms and banks on the main economic variables such as inflation, exchange rate, GDP and interest rates.
The monthly monetary report for August will also be published.
Source: Ambito
