Argentine bonds jumped up to 8% after US support for negotiations with the IMF

Bonds rose in two days to 16% and the S&P Merval accumulated a rise of almost 15% in the last four sessionsbefore the repurchases of positions in the middle of a better outdoor climate and before that the International Monetary Fund (IMF) generates the go-ahead for domestic accounts for the fourth quarter of 2022. on Wednesday Alberto Fernández met with his American counterpart Joe Biden what was read as a sign of support for the country.

In that context, the Argentine dollar bonds closed with a strong uptrend. So the ones that went up the most were Global 2041 (+8%), Global 2029 (+3.5%) and Global 2030 (+3.4%). So, the recovery that began at the beginning of the week is confirmed. It should be noted that the debt market comes from collapsing following the government’s decision to force official entities to deliver dollarized holdings in exchange for other pesified ones.

So, so far this month bonds post heavy losses although, on this day, only three remain with two digits (Global 2030 with -10.4%; Global 2029 with -11.4%; and Global 2046 with -11.3%). In this way, andhe country risk measured by JP.Morgan fell 39 units to 2,318 basis points towards the close of the local market, against a level of more than 2,500 units noted on Friday.

“To what do we attribute this pronounced rise? The comprehensive analysis of the situation leaves us with more doubts than certainties. In the first instance, The improvement in the external climate helped notably, especially those bonds whose behavior since their issuance can be explained in 66% by international factors. Now, is what is observed on emerging screens enough to explain this strong resurgence? No particularly favorable news, it is possible that the market is incorporating some rumors and political newssaid PPI.

In reference to the rumors, PPI mentioned as important: the possibility of an “export dollar” or “agro dollar”the lower political uncertainty after the resignation of Mauricio Macri as a candidate, and the visit of Sergio Massa to the IMFwhich would have been presumably positive.

However, on the previous day, Moody’s Investors Service lowered the outlook for the banking system from Argentina to ‘negative’, from ‘stable’given the “deterioration of operating conditions, amid a significant reduction in expected economic growth, with a probable contraction of GDP of 0.5% in 2023 and persistently high inflation, which already exceeds 100% per year”.

It should be noted that the Ministry of Economy awarded titles for a cash value of $294,502 million on Wednesday (about US$1,413 million) through a basket tender with seven instruments. 41% was made up of instruments adjusted to the official exchange rate, 31% at a fixed rate, and 28% by instruments tied to inflation (CER).

S&P Merval and ADRs

The main index, the S&P Merval ended the day with an increase of 1%, to 251,639.07 pointswith what accumulates an improvement of 14.8% in four trading sessions in a row. The rise was once again supported by energy and financial actions due to the behavior of ADRs on Wall Street.

“The recovery of the main Argentine stock index it has been as fast as its fall. On three wheels he added 67 points, meaning that he averaged progress of just over 22 points per day. A remarkable number. We will see how it continues in the coming days, but a priori the momentum seems to be running out of gasoline.”told PPI about what could happen in the short term.

Thus, in the leading panel the main increases corresponded to Edenor (+7%), Securities Bank (4.1%), and YPF (3.2%). Regarding ADRs, they were led by YPF (+3.7%), Transportadora de Gas del Sur (+3.1%) and Despegar (2.7%). Regarding the biggest falls, Edenor (-4.3%), Loma Negra (-1.2%) and Central Puerto (-1.2%).