The three-thirds scenario continues to be framed by the strong uncertainty that surrounds it and, although there are certain projections with a greater probability of coming to fruition, the truth is that, after the failure of the measurements before the PASO, the definition is still uncertain. It is because of that Ambit set out to analyze What would be the best scenario on Monday for Argentine assets to rise, and what result would generate a bearish trend.
Alejandro Bianchi, founder of Investment advisorin dialogue with Ambit He said: “I think the market discounts the runoff between Massa and Milei. A victory in the first round would be a surprise and would greatly accelerate the things that will happen sooner or later, this Monday or, failing that, on November 20. I think the delay of the official TC is unsustainable and will require an important adjustment“.
In this regard, it is worth highlighting that, after the PASO, The Government validated a devaluation of the official exchange rate of 22% and anchored the wholesale price at $350 until November 15. This generated an escalation in inflation that rose to 12.4% in August and 12.7% in September. At the same time, the multilateral real exchange rate which was, after the primaries, at the best level in two years It lost the competitiveness it gained in just a month and a half.
In fact, the futures market Matba-Rofexwhich until two days ago hinted at a very strong rise in the official exchange rate, only It was controlled by government intervention throughout the entire curve, which generated record volumes in six months. Despite this, however, The contracts for December are located at $814, for January at $990 and in March they will shoot up to $1,230, validating the strong jump in the TC.
Milei-Massa-Bullrich: the three thirds in dispute
“I don’t think the market has 100% discounted a victory for Javier Milei. I think it began to position itself a little in that sense, especially because the great hedge against the dollar that was noticed in the last 15 days, but not yet 100% in prices,” he told Ambit, Nicolás Cappella, sales trader of the IEB Group.
It is important to mention that this week The demand for exchange coverage was reactivated very strongly through of Dollar securities Linked, who had lost appetite after the PASO. Precisely subscriptions to this type of FCI strongly pressured the price upwards, which led to a complication for order management. According to a report by MegaQMthe monthly cashflow in pesos for these funds showed a volume of $316,363 million in subscriptions, exceeding all categories.
Given what would be the best scenario for Argentine assets to have an upward trend on Monday, Cappella predicted: “I think the market will see favorably, a scenario in which JXC remains competitive in the runoff (or the unlikely case of a victory in the first round) since in the eyes of the market, A JXC victory has fewer uncertainties and unknowns than a Milei victory. “Likewise, I believe that, In the eventual case of Milei’s victory on Sunday, the speech he gives will be very key to calm the markets and the exchange rate coverage.”hill.
In the same vein and also in dialogue with this medium, Rafael Di Giorno of Proficio explained: “I don’t think the market was discounting any particular scenario. There is an open end, so to speak, and there is almost a third chance that Milei wins in the first round. “One third of the possibility that he wins if there is a runoff between Milei and Patricia and another third that there is a runoff between Milei and Massa.”
For Di Giorno, The most benign scenario for the market is a second round between Javier Milei and Patricia Bullrichand that “that would imply a rally in the short term but we will have to see what happens in the next two months.”
How Argentine assets arrive at the elections
The country risk on the last Friday before the PASO was at 1,915 and this Thursday it is at 2,428 points, which implies an increase of 26.8%. Thus, Bonar 2030 sank 16.5% and its pair governed by New York law, Global 2030, fell 20.3%. Regarding variable income, the S&P Merval index, measured in foreign currency, fell 1.5% but in pesos it rose 59%, mainly driven by papers that have strong holdings of foreign assets linked directly to the dollar.
Source: Ambito
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