Dollar bonds ended the day with widespread gains. Thus, Global 2030 closed at US$30.10, a parity that it had not achieved since February.
The Globals had a very good day. This Wednesday, June 7, they registered increases that went from 1.4% to 7.7%. While, Global 2030 exceeded $30 for the first time in four months. Now, What is this optimism due to and will they continue to rise?
From the GrupoSBS ensured that “a day of celebration was lived in the Argentine bond market that operated from lowest to highest, with Globals are somewhat more in demand than Bonaresclosing at daily highs with average gains of $1.3 along the curve.”
Given this, the market handles several theories about the reason for this strong rise. According to a PPI report, there are two key factors that could influence the the level of reserves of the Central Bankon the one hand the potential agreement with the International Monetary Fundwhere news is expected next week, and on the other, the agreement with the Central Bank of China.
The activation of an additional US$5 billion of the swap with China could serve to obtain more resources to intervene in financial dollars. “The activation does not mean that the Government has access to the equivalent in dollars directly (for this, authorization should be requested from the Chinese Central Bank -unlikely-), but it does to pay for imports with that country,” explained PPI.
On the other hand, from IBE they assure that in 2024, with a new government in power, “foreign currency income from agriculture would tend to normalize. Agriculture will very likely once again obtain good yields that will allow it to contribute foreign currency close to the average.”
But also from IBE they warned that if one looks at a historical perspective and if a connection is made with the different sovereign bonds, “we see that the current levels almost price a debt with a high risk of defaulttrading at levels that are below the recovery levels observed in acid restructurings and with greater haircuts”.
Other operators also mentioned two other possible causes of the rise in dollar bonds. On the one hand, the famous “electoral trade”, whereby investors buy assets in anticipation of the possible election outcome. And, on the other, the debt exchange in pesos.
Finally, Juan Jose Vazquez de Cohenin dialogue with this medium, assured that “the perspective is that the exchange will be good and the short-term maturities will be ‘rolled’, mainly given the ownership that the public sector has. And subject to this, it is what remains with the private sector. This has helped to decompress the fear that exists in the fixed income market in pesos, which is the one that most affects banks“.
Source: Ambito
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