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Tuesday, March 28, 2023

S&P Merval in dollars accumulated a 22% drop in two months and touched its lowest level in the year

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Thus, in the stock market, the referential S&P Merval lost 2.12%, to a provisional closing of 220,447.04 points, after accumulating a loss of 12.1% in the last four business sessions. The biggest casualties of the leading panel were for Agrometal (-7.1%), Transportadora de Gas del Norte (-5.4%), and Ternium (-4.6%).

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In turn, the S&P Merval measured in dollars (CCL) fell 1.2% to u$s562.90, the lowest in almost three months (on December 22) and has lost 4.1% so far this year.

This Tuesday it was learned that inflation accelerated sharply for the third consecutive month. In February stood at 6.6%the highest level since August 2022 when the CPI climbed to 7% and well above what was projected by the market (+6.1%). Besides, in one year it exceeded 100%, for the first time in more than three decadesreported the INDEC.

The local market also operated immersed in global doubts after the bankruptcy of the Silicon Valley Bank (SVC) of the United States and the role that the Federal Reserve (Fed) will assume in terms of interest rates.

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“In this troubled context, the ‘Fed’ is expected to annul the rate hike at the next meeting on March 22at least until this situation is resolved,” commented Fernando Staropoli, account executive at Rava Bursátil.

It was thus that most of the currencies and stock markets of Latin America closed with losses this week, in the midst of increased aversion to risky assets. Wall Streeton the other hand, recovered this Tuesday against better than expected inflation data (+6% annual) and the possibility that the Fed will not raise interest rates.

In that context, ADRs from Argentine companies ended mixed. The main increases were for Mercado Libre (4.5%), and Despegar (+4%). They led the casualties, for their part, Central Puerto (-5.4%), and Transportadora de Gas del Sur (-3.6%).

The local government, finally, seeks that the International Monetary Fund (IMF) modify the objective of accumulation of reserves for 2023 in the face of a long drought that affects exportsafter its technical staff approved the fourth revision of the credit program for US$44,000 million, which will allow a disbursement of US$5,300 million.

This day the Central Bank (BCRA) accelerated the sale of reserves by ending with a negative balance of US$145 million, the most important amount since mid-February. The strong sale was explained by energy import payments and other imports, market sources pointed out. Thus, the monetary authority accumulates in the month sales for US$549.5 million.

Bonds and country risk

Dollar bonds ended the day mixed. Thus the greatest advance was for Global 2046 (+2.2%) and the main setback for Global 2041 (-4.5%). In this context, the country risk of the JP.Morgan bank rose 0.04% to 2323 basis points.

The short leg of the CER curve (securities maturing between 2023 and 2024) ended the wheel with increases between 0.1% and 0.4%. “Given this sharp rise in core inflation, the argument that core prices have stabilized loses its meaning and there would be no excuses for postponing a new rate hike,” they added from PPI.

Source: Ambito

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