The Argentine Senate will debate later on the deal that the Government closed with the Fund to restructure a debt of 45,000 million dollars, with which the country seeks to leave behind a long financial crisis.
The Argentine biotech company Bioceres and the American company Marrone Bio Innovations (MBI) announced that they have entered into a definitive merger process, which means that they become the world’s leading company in agricultural solutions, they reported in a joint statement.
On Wednesday, Argentine stocks soared up to 13% this Wednesday on Wall Street before the improvement of their external peers due to signs of progress in the peace talks between Ukraine and Russia that raised confidence and after the announcement of a rate hike for part of the US Federal Reserve (Fed).
The Federal Reserve (Fed, central bank) of the United States announced during the conference a rise in its reference interest rates by a quarter of a percentage point to take them to 0.25-0.50%, in the face of inflation in its highest level in 40 years and could continue to rise, according to his 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.
Bonds and country risk
On Wednesday, advances in both legislations were on a par with stocks, with the most traded and benchmark bonds, AL30D and GD30D, rising 0.58% and 1.65%, respectively.
“Likewise, the agreement is one of the main points to take into account for the bonds since bad news could deepen the negative dynamics that they are awarded, while, in the opposite case, it could give more flexibility to the flow of the bonds and give them, perhaps, a greater incentive from the market that goes hand in hand with a recovery of confidence,” said analyst Javier Rava.
Country risk fell 1.9% to 1,780 basis points, the lowest level since February 10.
CER-indexed bonds again captured greater demand and, consequently, an upward price that moved along the entire curve, one day after the Consumer Price Index was announced, which showed an advance of 4 .7%. “This circumstance is motivated by the fact that they are the favorite assets of retail and institutional investors who decide or need to maintain their investments in pesos and seek one of the best possible hedges at a positive real rate above inflation,” Rava said.
Source: Ambito
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