Mister Trump fulfilled his threat. The tariff cannon began. It was even more than expected even by the most pessimistic. Speculations are over. Although this just begins, as they warned from the main “Research” bunkers of Wall Street and London. From very early this Thursday they rained the analysis for customers and investors throughout the planet while the markets accused the coup and the purification of positions accelerated. As a synthesis, the consensus is that the tariffs announced USA: increase the downward risk for growth and upward risk for inflation, therefore, therefore, Fed bias will be to compensate for the impact of growthas long as inflation expectations remain stable, While they expect possible political responses from Europe and Chinaas well as internal support, they also seem likely.
In the internal planein the middle of the tenth trip of President Milei to the US, to which the political scientists described as inopportune, by the Trump momentum that has the head in something else, Everything revolves around the exchange uncertainty sown by Minister Caputo himself. The problem they see in the market is that The government is shown with some despair as a political sign, which again crown, as once again in contemporary history, to the dollar as a lighthouse of sensations, expectations and political climate. For the most seasoned political analysts, the Government has given politically excessive importance to the visit to the US, because if the effect does not go well it will be very negative. In this regard, one of the lucid political consultants recalled, in a reserved meeting, that a president with an economy in crisis can win, but needs speed and decision to react, and anticipated that The Government will lose 6 of the first 7 provincial elections of 2025 So he advises (Milei) not fighting with the governors.
Tariffs, treasuries and fed in trouble
In a turbulent bioceanic “call”, shaken by the announcement of universal and retaliation tariff which would exceed the highest tariff that the US had under the infamous Smoot-Halley law of 1930. They considered that the hope that uncertainty dissipated on April 2 was transformed into global fears of prolonged commercial war and did not eliminate uncertainty, since the duration of tariffs and the possibility of negotiation or reprisals are not yet clear. A handful of macroeconomists considered, from Wall Street, that Tariffs are both an initial opportunity for negotiations and a political approach in themselvesand while some countries are likely to obtain specific concessions, they expect the average tariff type to be significantly higher. Therefore, the ads press significantly upward inflation and growth significantly down What puts the Fed in trouble, And probably waiting, unless employment in the US is significantly deteriorated or that the most restrictive financial conditions (extension of credit differentials and/or a liquidation of shares) threaten growth. According to their calculations, the risks of greater inflation and lower growth are now significantly higher: Before ads, the risk of recession was 15%; now it is 45 % and would increase if tariffs are maintained or increased.
What is perceived is a lot of noise around the issue of the US public debt and How will the commercial war in capital flows towards the refinancing of the treasuries bonds (treasuries) beyond the fiscal bonanza for the collection of tariffs. Precisely, because US commercial deficits were the source of the commercial surpluses of their partners, which finally financed the Washington fiscal hole via Treasuries. Now, experts gathered in a bunker near the White House, some of them witnesses the agreement of the ’80s, commented to colleagues from large banks that as the theory suggests, tariffs reconfigure commercial flows, but do not reduce the current account deficit. Therefore, The official pressure for a weakest dollar conflicts with the attractive continuum of treasuries for global investorsand highlights deeper fiscal challenges since the management of external imbalances requires more than monetary interventions.
Something else is missing to calm the turbulent exchange waters
In a conclave among the main advisory swords of the Citysome with full arrival in Olivos, after discussing the commercial war, as in the rest of meetings, meetings and zooms, The local exchange theme dominated the scene. On the IMF issue, they agreed that, for the amounts announced and the maturities accumulated in the next four years, there are hardly a few billions of dollars (about US $ 2,000 million) in the BCRA reserves, today with a net negative position of 6,000 sticks. Therefore, Something else is needed to calm the turbulent exchange waters. One of them, confessed agricultural producer, marked the court: exporters do not liquidate due to exchange uncertainty and importers, quite the opposite, they hurry shipments. Everything looks “in the hands” of the IMF, but the truth is that there will be more pressure on the reserves of the BCRA and The producers know that in the grain they have their “reservations”, then, they prefer to wait to see what comes, if the Blend dollar survives, or everything goes to the Mulc or revives a flotation, it is a clear “Wait & See”.
With respect to that questioned by the IMF, Blend recalled that in the “available” market it operates as a reduction in the right of export, and If the fondomonomonist thesis triumphs and eliminating the blend that will hit the prices of A3 (Ex Matba Rofex). At the time of the scenarios, The menu goes from the extreme of maintaining the status quo to the other of free flotation, So increasingly gains more land in the expectations one of flotation administered with or without bands, but without devaluation, but without blend. They rule out a devaluation because it is the only thing that has a confidence to the government. One of the participants, monetarist expert, commented that, after the liquidation of the last tender of the Treasury, Lefi’s stock in the hands of public banks fell $ 1.87 billion and that of private banks rose to $ 1.56 billion. In this way, the Lefi balance of the public bank had fallen to $ 4.76 billion, a level not seen since September 2024, while private banks closed the month with the highest Lefi holdings since February 27. He recalled that, in the tender the treasure managed to refinance all the maturities rejecting positions for almost $ 2 billion. According to the reading of monetary statistics, they seem to It was the private entities that requested more rate in a context of uncertainty regarding the future of the exchange regime.
The clues that the futures give
In another financial bunker from the north zone, the official exchange rate was a meeting with a meeting on business with futures. According to the vision of these specialists, The dynamics of the dollar futures market shows in recent days that will be very difficult for the Government to maintain the current scheme. They consider that both the statements of the “Toto” Caputo and the President suggest that the Government will make an effort to avoid exchange disruptions, although they were also very suggestive in not reinforcing that the depreciation of 1%will be maintained. The consensus is more inclined to the disappearance of the Blend well into the fall than by the implementation of a band scheme. In that case, to compensate for exporters, The official dollar should deprecate 4.4% direct so that those who sell end financially the same. There the BCRA would maintain the “crawl” and with the IMF disbursements and anchor the inflationary expectations. In this scenario, after the elimination of Blend, if the current “crawl” is maintained, then, future dollar contracts as of May, even are expensive. Hence they bet on positions sold in the A3 towards the third quarter of the year, which can be compensated with positions purchased in April, adjusting the amounts to compensate for the difference in deadlines. For example, at current prices, the idea would be that for each contract purchased in April it should be sold 0.33 October contracts. In this case, if the Blend and “Crawl” 1% continue, then, the position bought in April would generate a loss of 2.6% that would be more than compensated by a gain in the October sold position. Only in the event that the October position does not compensate for the loss in the April position, then, it should go down to the “crawl” area of 2% what the Government seeks to avoid, but cannot be ruled out at all.
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Metro
MARKET: How do you see expert investors
To shake the exchange rate project, one of those present has just participated in two mega viny events on Wall Street (Value Invest NY and the New York Quality Growth Conference), where the Believe me of investors and many recognized asset management veterans who shared ideas about companies that quote significant multiples such as Home Depot and Tko Group (the WWE and UFC house), which are aligned with existing investments supervised by Boyar in Madison Square Garden Sports and Atlanta Braves Holdings. While the approaches of these viny are very different, both offered a valuable perspective on How some of the most expert investors in the world consider the current market. For example, in Value Invest NY, the atmosphere was surprisingly optimistic, perhaps too much, but the truth is that it was clear that The trend is changing in favor of materials and energy. Less attractive in great technological and instead more focus on industries with more favorable supply and demand dynamics.
Very commented on the presentation of Samantha Mclemore (Patient Capital) taking advantage of the lessons learned next to the legendary Bill Miller. There was also time to listen to Andrew Wellington (Lyrical) a jewelry search engine between scrap. In the other Viny was diving in large companies, with solid competitive advantages and global scale. Among the speakers, James Bullock (Lindsell Train) was highlighted who focused on the TKO group, the WWE and the UFC parent company, and provided interesting data: in 2000, the RAW transmission rights of the WWE were worth US $ 28 million annually; Today they exceed US $ 500 million (12% per year). However, Bullock believes that the agreement is still undervalued compared to the NFL, whose rights are valued in 20 times that figure. Another curious fact: WWE has more YouTube subscribers than NFL, NBA, MLB and NHL together, even so, with 49 times its profits.
Source: Ambito
