Against this background, the actions of Mercado Libre climbed 6.3% and led the rises of the day. Then the papers appear. take off (+4.3%); Telecom (+3.9%); and IRSA (+3.6%).
In the porteña bag, The S&P Merval stock index gained 1.6% to 85,394 points, after falling 1.1% in the previous session.
“The local square continues to await the final agreement with the IMF, which seems to continue advancing in the Senate until Thursday, when it will be debated and the final sanction will be known,” said Gissela Avenia of Rava Bursátil.
He added that “the market expects an increase of 0.25%” in the US interest rate.
During the wheel the Federal Reserve (Fed, central bank) of the United States raised its reference interest rates by a quarter of a percentage point to take them to 0.25-0.50%, in the face of inflation at its highest level in 40 years and which could continue to increase, according to their forecasts.
The situation in Ukraine “could create additional upward pressure on inflation and weigh on economic activity,” the Fed said in a statement, after a two-day meeting of its monetary policy committee (FOMC).
Those responsible for the agency foresee additional rate hikes this year, and predict a GDP expansion of 2.8% in 2022 compared to 4% of their previous forecasts.
The Fed reported a “high” inflation that is explained by “supply and demand imbalances related to the pandemic, high energy prices and generalized pressure on prices”, for which further increases in the monetary policy rate will be “appropriate”.
The Fed cut its benchmark interest rate to zero in March 2020 to support the economy, consumption and investment, in the face of the coronavirus pandemic.
The head of the Fed, Jerome Powell, has indicated that the body will seek to control inflation, without affecting economic growth.
The market expects a total of seven rate hikes this year, to bring this reference to 1.75% per year, assuming increases of a quarter of a point at each monetary policy meeting of the entity.
The FOMC, in its latest projections, reported an estimate of 4.3% for inflation in 2022, from a previous 2.6%.
This is the first rate hike since December 2018.
After the statement, the Dow Jones erased its gains for the day on Wednesday, even briefly reaching negative territory. At 18:20 GMT, Wall Street’s flagship index gained a modest 0.13% after reaching 1.72% earlier in the day.
Bonds and country risk
In the fixed income segment, dollar bonds rebounded as much as 0.5%. Thus, the argentine country riskprepared by the JP.Morgan bank, fell eight basic points, to 1,807 units. This is its fifth daily drop in the last six days, after touching 1,991 units last week.
In the segment of pesos, for its part, the CER titles gain up to 1% after the INDEC announced on Tuesday that February inflation shot up to 4.7%, well above what the market expected. (3.9%, according to the latest REM published by the BCRA). At the same time, core inflation was 4.5%, accelerating compared to January (3.3%) and standing above estimates.
Thus, the most outstanding rises of the day are recorded the Boncer 2026 (+0.9%), and the Boncer 2022 (+0.7%)
The SBS Group economist, Juan Manuel Franco, estimated that “Going forward, inflationary pressures will continue based on the drag of the 2021 issue, the fall in the seasonal demand for pesos, the recomposition of relative prices, especially rates and services, and the acceleration in the pace of the crawling peg.”
He also added that, despite the limit of 1 percentage point of GDP in monetary assistance from the BCRA to the Treasury this year, as it appears in the agreement with the IMF, “monetary aggregates would continue to put pressure, for example, by channeling bank liquidity into Treasury securities”. Thus, Franco believes that inflation “It would accelerate in March, since it will impact the rise in gasoline and some other regulated items, and it would remain high during the first half of 2022.”
From the Ministry of Economy, also, They pointed out that the rise took place “within the framework of the increase in prices at a global level affected by the war between Russia and Ukraine”. “The indicator was affected by the impact of the rise in international prices of the main commodities, due to the drought and the conflict in Ukraine,” they stated in the portfolio led by Martín Guzmán.
The Food and non-alcoholic beverages division was the one with the highest increase in the month at the national level, with an increase of 7.5%, with which this item contributed more than 2 percentage points to the increase in the General Level.
In the meantime, President Alberto Fernández announced that next Friday measures against inflation will be put into practice. “I promise that another war will begin on Friday, the war against inflation in Argentina. We are going to put an end to the speculators and we are going to put things in order,” the president said in a public act.
Source: Ambito
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