At a conference, Federal Reserve Governor Lael Brainard said she hopes methodical interest rate hikes and rapid reductions in the Fed’s asset portfolio to bring US monetary policy to a “more neutral stance” later this year, with further tightening to follow as needed.
Brainard’s comments “have shown that the Fed is willing to be more aggressive,” said Kristina Hooper, chief global markets strategist at Invesco. “That is certainly having a negative effect on equities due to concerns that this will increase the likelihood of a recession,” Hooper said. “It’s going to get harder and harder for the Fed to engineer a soft landing the more aggressive it gets.”
Consequently, 10-year US Treasury yields rose to three-year highs.
Last week, the Argentine country risk fell 4% and this Monday, it had marked its lowest level since mid-December (1,692 basis points).
In this framework, the Argentine bonds denominated in dollars operate with losses of up to 2%, thanks to Global 2035, followed by Bonar 2029 (-1.4%) and Global 2030 (-1%).
“The ‘fly to quality’ (hedging in less risky assets) that was seen abroad had a negative impact on the papers of the entire universe of emerging debt and Argentine bonds did not escape this trend”, Said Portfolio Personal Investments.
“American corporate debt is very ugly, which is the ‘benchmark’ (performance indicator) of Argentine debt that is rated ‘C+’ by Standard & Poor’s,” said a bond trader. “We had several orders from abroad in block sales abroad, and that hit a lot of the entry, now (the market) is settling down a bit,” he added.
“After the ‘delivery’ with the IMF, and with the presidential elections still far away, the correlation between the domestic and foreign markets was increased,” said the StoneX brokerage. “With such long maturities for dollar sovereign bonds and a possible new restructuring in 2025, ‘Bonares’ and ‘Globals’ (titles) fit better into the variable income category than fixed income,” he estimated.
S&P Merval and ADRs
In the Buenos Aires stock market, the index S&P Merval scores his second consecutive loss, fell 0.6% to 91,255.02 points, due to selective profit-taking together with a cut in business.
The protections against aggressive actions in the US market hit Argentine papers listed on the New York Stock Exchange. The shares of Mercado Libre and Globant lead the falls, with falls up to 5.6%. also descend Edenor (-1.8%), Loma Negra (-1.7%), Despegar (-1.7%) and Grupo Financiero Galicia (-1.5%).
Source: Ambito
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