With some inflation-linked local currency bonds under pressure, the Government was forced to adopt a defensive attitude against the risks of non-compliance. Official entities even went out to buy debt to stop the debacle. “As for the barbarism of stopping paying the debt in pesos: our government would never do that”Economy Minister Martín Guzmán said in a tweet.
This Tuesday it was known that inflation slowed for the second consecutive month, but still remained at high levels, registering 5.1% during May, from 6% in April and the peak of 6.7% in March, according to reported this Tuesday the National Institute of Statistics and Censuses (INDEC).
For its part, the country risk scored on Monday its all-time high since September 2020, and closed at 2,124 points. This day the index rose 0.05% and stood at 2,125 basis points. In this context, dollar bonds closed at historical lows. Thus, the main decreases were for Global 2029 (-2.9%), Bonar 2029 (-2.2%) and Global 2030 (-2%).
In another day of high exchange rate tension, the financial dollar maintained the upward trend, but a little more moderate than what has been observed in recent days, with the CCL above $239, after a downward start, and the MEP, which posted a new nominal record.
In the midst of exchange rate tension, moreover, The Ministry of Economy managed to pass the first test in June, capturing $21,587 million this Tuesday, thus achieving net financing.
“Pressures on financial dollars are growing, with a gap returning to very high levels (…) given that the expectation of ‘more pesos, less dollars’ towards the second semester”, said Gustavo Ber, an economist at Estudio Ber.
In addition “the noises about the CER securities (inflation), which could require a greater monetary issue in case investors’ confidence is not quickly recovered, and the international climate of ‘risk-off’ that activates the search for coverage and this accentuates the challenges“.
Stocks and ADRs
The BYMA S&P Merval fell 0.6% to 87,400 points, which adds to the 1.35% drop the day before. In the leading panel, the biggest losses were for Banco Supervielle (-3.7%), Transportadora de Gas del Sur (-2.8%), and Central Puerto (-2.7%). The rises, meanwhile, were led by Sociedad Comercial del Plata (+3.5%), BBVA bank (+3%), and Transportadora Gas del Norte (+1.9%).
The volume in shares fell 12.7% to $1,083.5 million, representing just 17.3% of the volume traded in equities. Thus, more than the remaining 82% was traded on Cedears, whose daily amount fell 21.1% to $5,182.2 million.
For their part, Argentine companies on Wall Street also closed with majority losses. YPF (-3.9%), Banco Supervielle (-3.6%), and Transportadora de Gas del Sur (-3.2%), were the ones that fell the most. Edenor (+4.2%) led the increases together with Ternium (+3.3%), and BBVA bank (+2.9%).
“While waiting for this Wednesday’s decision and the signals from the Fed, Wall Street appears expectant after the sell-off that plunged it into a bear market, given the expectation that the projected pace could accelerate, discounting an increase of no longer than 50 bp. but 75 bp”, analyzed Gustavo Ber.
In this context, “domestic assets timidly and selectively take advantage of the respite from the north, after the heavy punishment they have been accumulating, even within a climate of caution since they must also withstand the daily political tensions and the climate of economic uncertainty, given that the last threat of premature electoral trade was quickly evaporated”.
Source: Ambito
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