In September, inflation-adjustable securities experienced losses of 9%, those linked to the dollar of 8.6%, and dual securities of 7.2%.
The debt in pesos is showing a strong dynamic of sell off a few weeks before the elections and in the face of the uncertainty that prevails about what the new economic direction will be. The last four weeks the different papers showed negative returns while investors look for “cover” ahead of the polls.
“The debt market in pesos entered a new stage of high stress levels. The political noise generated by the elections and the alternatives proposed by the different candidates generated doubts in investors. The main question is how this can evolve going forward.in a market that continues adding pesos and whose controls have no room for flexibility until the change of government,” he warned. Megaqm in a report.
Does history repeat itself?
These movements are similar to those that occurred during the end of May and beginning of June 2022, when The sell off of debt in pesos severely complicated the Government’s access to the local market and forced the BCRA to purchase government bonds for more than $1 billionDelphos reported.
On this occasion, the weakness of the debt in pesos that began more than a week ago intensified and showed new dynamics in the CER, Linked Dollar and DUAL curves. “In the CER Curve, the yields of the medium section rose above the rest, which indicates greater fears of default in the medium term”they explained from the same report.
What we can expect
For different analysts, despite the adverse economic context, the last tender was successful since The Treasury achieved a 210% roll-over, accumulating net financing of $1.2 trillion in September.
“However, In December the new government will need to finance a primary deficit close to $1.4 trillion with a mix of monetary issuance or new debt. If the downward trend persists, the new government would face serious difficulties in placing debt at reasonable rates in a context of high volatility of expectations,” they explained from Delphos.
If we focus specifically on the elections, to Megaqm, The economy is entering a stage of high volatility. “A period of 3 well-marked stages begins, the first is one of high instability and includes the entire electoral period”They specified, the second will have a new devaluation and an inflation rate above August levels, and in the third a new Government plan will be implemented.
Source: Ambito
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