To the rescue of the abyss: the keys to Scott Besent’s announcement and the multiple impact on the market

The Critical political and financial situation demanded a strong and urgent signal. The dynamics of the dollar rise -given to pierce the roof of the band -, the consequent sale of reserves to stop it, and the destruction of value of the Argentine assets -before the return of the fears of default – An idea of ​​the end of the cycle began to erect until last week. At least, under the current exchange and monetary scheme.

And relief arrived at a key moment, prior to the opening of the markets on Monday, with a strong support in the Worst moment of the Government of Javier Milei. “The US Treasury is willing to do what is necessary within its mandate to support Argentina”, He wrote in X, the secretary of the US Treasury, Scott Besent. And expanded: “All options are on the table” To stabilize the Argentine economy. Thus, the support alternatives may include -dalló- public debt purchases called in dollars, direct currency purchases, or a “swap line” (agreement to exchange currencies with the objective of injecting dollars into the Argentine economy).

Besent’s message, with a clear geopolitical meaning, enhanced the announcement of two hours before about a Surprise removes grains -In then to meat- until October 31 (or until entering US $ 7,000 million). The measure showed that, in reality, The Central Bank was not going to “sell until the last dollar” that is necessary To defend the exchange rate on the band’s roof, as Minister Luis Caputo had announced last Thursday.

Impact on the dollar and financial assets

The market reacted with Immediate euphoria. He spot dollar fell 4.5% to $ 1,408eliminating the rise of last week (+1.5%) and part of the previous one (7.2%), and approaching day levels after Elections in PBA ($ 1,410). Thus, the spot was 4.9% below the upper band ($ 1,477)which avoided the need for intervention of the Central Bank After sacrificing US $ 1,100 million in the previous three days. In banks, the retail He sank 5.6% ($ 85) to the $ 1,438.30but the ones who collapsed the most were the CCL and MEP (-8%)which ended in the area of $ 1,427/$ 1,440. The note: the Central Bank I did not intervene (although the reservations They went down U $ 71 million).

In the stock market, investors regained some air. The sovereign bonds They erased the losses accumulated last week: they climbed between 14% and 18%while the country risk He collapsed 25.6% to 1,083 points (From the 1,456 previous). Financing alternatives by USA They begin to guarantee for the market the payment of the maturities of January (U $ 4.200 million). Beyond the eventual use or the concrete size of an assistance program, investors interpreted the gesture as a clear sign of political and financial willenough to begin to revive expectations after recent turbulence. Of course, as of Tuesday, the looks will be placed in the definition of concrete measures.

He Universe in pesos He also joined the rally. Both fixed rate bonds like the adjusted by CER They showed strong improvements: the first climbed up to 7% And the latter until 6%with yields that closed around 23.4% on average. In parallel, the Lecaps they compressed their Tems up to a range of 3.2%–4%while BCAPS they advanced to 3.6%–4.3% and the Bontams until 2.6%–3%according to PPI.

Finally, the Actions They were not outside of optimism. He S&P Merval accompanied the rebound of the debt in dollars and jumped 17%to be located in U $ S1.257. With this escalation, the index managed to cut part of the losses of September: it went from accumulating a setback of the 26.7% on a decline 10.8%.

The exchange front is broken down, but the pressure for October is not clear

Waiting for the bilateral meeting of Javier Milei with Donald Trumpthe support of Washington Not only does the exchange forehead, but also returned air to financial assets. With the North American Treasury Behind, the market interpreted that they move away, at least in the short term, the ghosts of a default.

For the market, it was achieved gain timerather than solving background imbalances. Rafael di Giorno, director of Profement Investment, He argued that the support of USA “It was important enough to stop the run, along with the decline of retentions”, and that “in the short term he put a Torniquete to the dollaralthough forward we will have to see under what scheme the exchange rate will operate. ” Martín PoloChief of Strategy in Cohen financial alliesthe US signal “away from default ghosts and support the market, decompressing the exchange rate and going down the country risk“But” the economy still needs to rear and find a new balance, and you will have to see the Chico del Agreement”He stressed.

Facing October, the Economic program It will remain under pressure. The dynamics fiscalnow more adjusted by the temporary removal of retentions, the need to sustain surplus and the political uncertainty In Congress they will be determining factors to know if this rebound manages to consolidate or if it barely works as a Transitory bridge.

The measure on withholdings It implies just anticipate dollars that would have arrived later, without generating new currencies, and the exchange rate management It will remain a key test. The signal of Besent It gives oxygen to Band scheme To try to get to 26. The October result will have implications on the way in which the exchange rate and on what level will administer, with a Treasure I Central Bank that inevitably must incorporate the idea of Buy currenciesdiscarded by the economic team and with high costs in the last five months.

In short, the Besent support He calmed down run And he returned air to Argentine assets, but did not solve the background problems. While there are no signs of new political agreements and greater predictability heading to Octoberthe volatility The rule will remain, even with such overwhelming relief measures as those on Monday.