Celebrations everywhere marked the end of the year and the call, by a large part of the market, “change of era” on both banks of the Río de la Plata. The markets operated, with many people on vacation, with volatility, in short weeks with the prominence of interest rates after the swings prior to Christmas and New Year. The appearance of the celebrations is framed in the strong profits accumulated in the yearespecially those who opted for the libertarian experiment. In this regard, a well-known regional advisor, former Bear Stearns, told clients and colleagues in a agape in Fort Lauderdale (Miami) that That investor who bought the Argentina 2035 bonds in New York since Javier Milei’s victory is about to triple his moneysomething rarely seen since an electoral victory. This feeling of optimism also seems to have a correlation in part of public opinion since, according to an Argentine colleague invited to the agape, a recent survey showed that on the one hand 52% negatively evaluate the current economic situation of the country but in terms of future expectations, 53% of the population believe that the economy will be better in a year.
At the meeting there were many people from the Latin American trading desks, especially currencies. What did they say? Everyone is looking at three currencies: the Mexican peso, the real and the Chilean peso (they are trading in ranges of $20.7-21, R$6.23-6.9 and $996-1,000 respectively). Regarding Mexico, they say that the President is not doing things well but not so horrible either, but They see no incentive for the “carry trade”while in Brazil The central bank continues to intervene but what happens is that all it does is moderate the scenario but not change it, investors They do not see an important trend change so as long as Lula continues doing his thing to the real they see it closer to 7 than 6. In the Chilean case, the dollar being close to 1,000 pesos makes trans-Andean tables make mistakes and operate believing that the rise in the dollar is due to an external issue. An experienced currency manager, who operated for years in Santiago, recalled that the big deals or failures were made by selling dollars and not buying, because historically the central bank has had a protective role and therefore the operators go out to play waiting for the The monetary entity comes out to protect them, to defend them, because they have enough reserves, it may be true but some threat may also arise, that is why the healthiest thing is not to go against the dollar. These two light weeks allowed these final meetings in the midst of few operations, low volume and the occasional surprise. A lot of noise now with the data from China, but also with the two attacks in the US, especially the one in Las Vegas where a Tesla exploded in front of a Trump hotel, a symbol for analysts. From what was perceived in these meetings and In the first conversations of 2025, the market starts more calmly and little activity will be seen, so caution is advised.
Signs of peso shortage and outlook for bonds
A group of market men lagging behind their peers who have already crossed the pond, commented in a bunker in Puerto Madero about the news that the IMF will carry out an evaluation of the program this month, which constitutes one of the previous steps to negotiate a new agreement with Argentina. Regarding the local financial market, they highlighted that the 3-day surety rate was negotiated at 35% nominal annual average in BYMA last Monday in line with that of the BCRA, but that it had reached above 40% annually. At the same time, the stock of active BCRA Passes exceeded half a billion pesos last Friday. For these local experts it is all signs of a shortage of pesos at the end of the year. In any case, they believed that the strong rebound in the long section of the fixed rate curve fits in with the lower inflation expectations.
Looking ahead to 2025, they indicated that The bonds have price inflation of 1.9% average monthly for the first four months, 1.4% average monthly between May and October and just 0.8% average monthly between November and January 2026. A fan of the argentólares calculated that the stock of deposits fell more than 3,050 million since October where in the last part of the year the typical seasonality of Personal Assets may have played something in favor although it makes sense that this time the seasonality has been much less marked , for the success of the laundering.
In the international context, there was a lot of talk about the pressure that bonds continue to endure, as long-term US Treasury bond yields rose due to higher inflation expectations in 2025, which put downward pressure on stocks, in a clear contrast against investors’ hopes of witnessing the traditional Christmas rally (“Santa Rally”). One of the most academic with a past at the New York tables pointed out that Powell wants to keep the Fed’s decisions separate from political events, but some analysts understand that the Fed’s projections of higher rates and inflation respond to Trump’s proposals for increases. in import tariffs. At that point, the most speculative of the group appeared, projecting scenarios for Argentine bonds in March if they converge to rates of other emerging markets. He recalled that on January 9, a payment of US$3.5 billion in capital and interest will be made to the private sector, which will generate an excess supply of foreign currency, which combined with the good performance of fiscal accounts, could boost new increases in Argentine assets, especially in dollar bond prices. If this player’s prediction is true, the GD30 and GD35 bonuses could rise by more than 15% and 26% respectively. A more cautious colleague recommended putting in some of the BOPREAL 2026 bond that is yielding almost 10%.
A 2024 of very high profits: and 2025?
While on the other side of the shore, the regular tribes of Punta del Este and José Ignacio installed in the run-up to the festivities, exude optimism about what is to come, especially if the fiscal anchor is maintained and inflation continues to subside. Of course They understand that at these prices it is very unlikely that a year of profits as high as those given in 2024 will be repeated.. The thing is that as Argentine bonds approach the yields of their peers, each point of compression in their rates becomes more expensive. A banker, who opened his farm for clients and friends, told them that they are preparing for a much tighter competition between sovereign, provincial and corporate bonds. For this reason, a guest pointed out that the prospects for the “carry trade” were less attractive, and There would only be tactical value in the “carry” with LECAP and CER bonds to take advantage of the fact that the BCRA’s interventions put a ceiling on the financial dollar.
About the December inflationa diner shared the data from the latest EcoGo survey that indicates that The seasonality of summer vacations and festivals drove consumption and prices upward last month: Food and beverages +3% and monthly inflation at 2.9% (driven by the price of beef, which rose 9.7% monthly in the first week, food consumed within the home rose 3.2% and food consumed outside the home 2.1%, that is, in the last 12 months they accumulate increases of 116.2% and 98.2% respectively and leave a drag for January of 0.7 points). But the consensus of those present is that Brazil will be the region’s Achilles heel this year where the depreciation of the real and the instability of mineral prices will continue to be present with the arrival of Trump to the presidency. The numbers fanatic said that with Lula the fiscal deficit is 10% of GDP, with interest payments, and the external deficit is 4%, so that a dollar at 6 reais is not a surprise, so he fears that the private sector, if the depreciation continues, go out and look for coverage, deepening the problem.
On the other side of the conclave, the women gossiped about the new “Tucu” Martínez boutique, the Tuken Vintage, a new cultural and fashion meeting point, which had among the more than 200 guests at the inauguration Andrea Frigerio, Zuzu Coudeu, the sisters Rossella and Patricia Della Giovampaola, Teresa Calandra, and even Ramiro Agulla, among others. But without a doubt the event was in Lote 8 where almost all the leaders of finance and business were present at an exclusive lunch in Pueblo Eden. They invited chef Lucas Bustos from Gurisa for the gastronomic event where they presented the Lote 8 olive oils to society. Among others, the following were present: Alejandro Macfarlane, Angie Landaburu and Augusto Marini, Evangelina Bomparola and Juan Pons, Alejandro and Bettina Bulgheroni, Jorge Brito and Gabriela Vaca Guzmán, Pablo Cosentino, Cristiano Rattazzi and Gabriela Castellani, Eduardo Maiorano and Patricia la Negra Torres, Augusto Rodriguez Larreta, Sabine Mulliez and Pedro Aguirre Saravia, Enrique Bruchou, Anita Álvarez de Toledo, Ana Luisa Behrens, Jorge Pepa, Solange Mayou and Stefano Costigliolo. In one corner there was talk about the refinancing of MSU Energy’s 600-stick international bond that matures this year. Apparently they structured a syndicated loan of more than 200 pieces and issued a new international bond to 2030 for the rest.
Source: Ambito
