Dollar, bonds and stocks: what the market expects for the day after the STEP

Within hours of knowing the results of the elections, it is that Ambito compiled the main projections of what could happen in the market, taking into account the possible results. United for the Homeland settles its internship between the current Minister of Economy, Sergio Massa, and Juan Grabois. As for Together for Change, Horacio Rodríguez Larreta is measured against Patricia Bullrich, and Javier Milei seeks to get into the race for October.

It should be noted that on Friday the informal dollar advanced $3 to $605 for sale. He qatar dollar closed on the last business day in the $600.02. For his part, hehe stock exchange rates ended mixed: the MEP at $539.89 and the CCL at $601.24. The S&P Merval had finished higher, with stocks jumping nearly 9% but with Argentine bonds falling ahead of the election.

Dollar: what to expect on Monday

The economist Camilo Tiscornia from C&T Consultants said the more possibilities the perceived financial market of a possible change of government, it is probable that the situation in the financial exchange rates “stay calmer”. However, if the Union for the Homeland (UxP) shows greater competitiveness and it is not clear what will be he bottom line up Octoberthis uncertainty could, “potentially increase nervousness and generate effects in financial exchange rates”.

Alejandro Giacacoiaeconomist of Ecoviews stated that “A scenario where Together for Change (JxC) wins is not the sameone where the UxP is doing better than expected or one where (Javier) miley Get a good number of votes. For Giacacoia, a solid performance “of the extremes, like Milei or Massa”, could induce some turmoil in the foreign exchange market. Also, a crucial aspect to consider is the currency strategy that the Government will adopt after the elections, “with a focus on the agreement with the IMF”.

For Lucio Garay Mendezeconomist of EcoGothe movement of dollar It will depend beyond who is the winner, which “be the difference between the candidates and, above all, between the main political parties”. Given the background, it is very probable that “there will not be major changes in the dollar exchange rate“, since there was already an “anticipation on the part of the people and the parallel dollars They already presented significant increases”.

For PPI, Sunday will mark a “before and after” with very “dissimilar” results. So much so that they affirmed that, according to the results, it can have a different impact on the dollar. A opposition Advantage, “Eases the transition, lowers the dollar CCL and the currency gap. It would help reduce the expectation of discreet jumping from the officer.” Instead a strengthened ruling party “could put additional pressure on the dollar CCLfurther currency gap and a more limited margin of maneuver to avoid the devaluation of the official”. Finally, in an intermediate scenario, the opposition wins but not by a high margin. Stretch the scenario of tension and uncertainty until October.

Stocks and bonds: what could happen on Monday

roman group he also produced a probability analysis. In it Scenario A (35% probability) –JXC obtains a volume > 40%, the ruling party takes 24-27%, and The Freedom Advances get >20%. In this sense, Romano points out that, if so, the results will possibly materialize a bullish rally very important of the Argentine assets until october elections. Possibly, with this “emptying of power of the ruling party” and of Massais pressed towards official dollar devaluation and there is a fall of the financial dollars searching bridge the gap and start the monetary adjustment who is asking for the Background (devaluation 40-60%).

In scenario B (35% probability), JXC obtains a volume of votes between 36-40%, the ruling party draws equal to or Freedom Advances does not get more than 18%. In this scenario, where JXC is heading to win the general electionspossibly there will be a new rise in the Argentine assets and there will be a relaxation of the financial dollars, as estimated by the Romano Group. Yeah JXC is close to winning first roundthe impact will be even greater towards the drop in financial dollars and bond appreciation and local actions. If, on the contrary, the result is JXC with 36% vs. the ruling party with 30%, possibly the government will try avoid devaluation of the officer and look to be competitive in October. If it is competitive, the current management will try to avoid at all costs the officer devaluation.

In scenario C (10% probability of occurrence), the ruling party take out >35%, JXC take out =Freedom Advances draws equal to or worst scenario in the short term for the marketwhere the pressure towards financial dollars and downward corrections would be generated in the local assets. Romano does not see chances of one officer devaluation and will try to give liquidity to the “pockets”, contain prices and generate an effect of revaluation of wages real in 3 months.

In scenario D (20% probability of occurrence), scene of thirds between JXC, ruling party and Freedom Advances (LLA). This is a very complex scenario because the chances of a ruling party maintaining power grow strongly. If it was left out of ballotage La Libertad Avanza, but with a high volume of votes greater than 24%, it is not clear where those votes would go. If, for example, the candidate for JXC out larreta instead of Patricia Bullrichyou should naturally see a lineup between Milei and Bullrichbut this scenario would leave a new argentine government very weakened and opening the possibility that javier milei win the elections (without experience and political volume to contain a possible major social crisis).