After the furor, Argentine ADRs suffered sharp falls; bonds were sustained and climbed up to 6.4%

The Argentine stocks stopped their bullish rally this Thursday June 22 and suffered strong setbacks, in contrast to dollar bonds that extended their positive streak and gained up to 6.4%.

The falls of the Argentine ADRs were led by Grupo Supervielle (-9.3%), Grupo Financiero Galicia (-7.3%) and Banco Macro (-5.8%). On the contrary, Take off actions advanced (+6.2%), Mercado Libre (+2.5%) and Bioceres (+0.4%).

For her part, the porter bag fell for the first time in 6 days due to foreseeable profit taking, after previous strong increases that pushed the leading panel to renewed maximum historical values ​​in pesos. He S&P Merval lost 3.4%, to 415,186,380 points, after advancing a strong 5.1% in the previous day and setting a record level in pesos of 430,470.64 units.

Investor attention focuses on political aspects just two days before the registration of presidential formulas closes for the August primary electionheading to october generals.

In an economy complicated by inflationthe devaluation of the pesoa high tax expense and reduced reserves in the Central Bank (BCRA)the government seeks an agreement with the International Monetary Fund (IMF) to reschedule goals and advance disbursements, while showing signs of goodwill to cancel payments of some US$1.9 billion in Special Drawing Rights (SDRs).

The monetary institution had to sell US$85 million of reserves to meet market needs, thereby accumulates a negative balance of US$420 million in the month and US$2,537 million so far this year.

“The amount of official sales is similar to the advance payment for energy imports registered today”said an operator.

The historic drought caused the loss of some US$20,000 million for the treasury from the rural export sector, which causes a noticeable retraction in the reserves of the Central Bank (BCRA).

This makes the Government expedites negotiations with the International Monetary Fund (IMF) to change pending goals and look for an advance of new disbursements, while there are signs of good will to cancel the payment of some US$1.9 billion in Special Drawing Rights (DEG) according to the committed organizational chart.

The electoral context has the expectation of a change of government in the short term that adopts concrete measures to correct the structural imbalances in Argentina, a fundamental basis for restoring investor confidence and accessing external private credit.

In the external context, all eyes are on the second part of the semi-annual conference of the Federal Reserve Chairman, Jerome Powell, before Congress. on the eve, Powell told lawmakers that expecting further Fed rate hikes is “a pretty good guess” for where the central bank is headed if the economy continues in its current direction.

Bonds and country risk

In the fixed income segment, and unlike shares, sovereign bonds in dollars continued their positive streak led by the Global 2041 (+6.4%), Global 2046 (+3.4%), Bonar 2029 (+4.3%) and Bonar 2035 (+3.8%).

Thus, the risk country What does JP Morgan measure? down 2% to 2,216 basis points.