Investors remain attentive to the interventions of the US Treasury and the exchange rate tension prior to the elections.
Dollar bonds resume their upward path this Thursday after of the announcement by the US Secretary of the Treasury, Scott Bessent, who on Wednesday advanced an extra financing package for US$20,000 million from the private sector, while hedging continues in the market just over a week before the legislative elections on October 26. In equities, the S&P Merval rises more than 1%, while ADRs climb up to 2.5% on Wall Street.
In this context, the market operates with strong volatility, attentive both to upcoming announcements and to the intervention of the United States Treasury in the exchange market.
In this way, the tDollar securities climb up to 1% led by Global 2030, followed by Bonar 2030 (+0.7%) and Global 2038 (+0.7%). Thus, the country risk measured by JP Morgan once again oscillates around 1,000 basis points.
The US government has just announced different lines of aid for Argentina, such as the formation of a currency exchange (swap) for US$20,000 million to be subscribed with the Central Bank (BCRA) and another similar amount contributed by investment funds for an eventual purchase of bonds, apart from the acquisition of pesos in the wholesale market to generate liquidity in dollars.
“The Milei Government needs to hold a good next legislative election to achieve significant political power and thus carry out the structural reforms that it has been promising since the beginning of its mandate, both in terms of labor, taxes, and investments,” a corporate analyst at Bull Market Brokers told Reuters. He added that “to carry out these fundamental reforms it is essential that they have weight in Congress, beyond the political consensus that he will need to face his last two years in office.”
Analysts and investors believe that the Government will likely modify its exchange rate policy to allow for a weaker peso after the midterm elections. They consider that the current band is unsustainable and that US support would only serve to buy time.
The Minister of Economy of Argentina, Luis Caputosaid on Wednesday that he hopes to advance and execute the swap framework with the United States “very soon” and that it would be before the October 26 elections.
On the other hand, the Argentine Treasury took $1.76 trillion this Wednesday in a tender where 45.68% of the expected maturity of debt in pesos was covered, releasing a large liquidity that, at the discretion of operators, will go in search of dollarized instruments.
ADRs and Merval
Meanwhile, the ADRs of Argentine companies listed on Wall Street They operate with slight increases on Wall Street. The advances are led by BBVA (+2.5%), Banco Macro (+1.7%), and central Puerto (+1.4%).
In turn, The Buenos Aires stock market showed a moderate increase of 1%, led by financial actions.
Source: Ambito
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