At the same time, the BOPREAL begins to be liked, which could lead to a correction in the rest of the financial assets due to the dismantling of hedging portfolios that seek to add these new titles to portfolios, generally composed of a mix of dollar linked, CER and dual bonds. All this, in a context in which the Government has just reversed the fiscal package of the omnibus law, a bad sign for the market.
Faced with a slowdown in Consumer Price Index (CPI) demand could fall CER bondswhich would have a positive impact on their yields, which are negative today, where the longest ones were the ones that registered the greatest increase in January, going from positive returns to -14% and -10% (TX26/28), as indicated in statements to Ambit, Rafael Di Giornodirector of Proficio Investment.
For example, since Econviews They point out that in the last week of January a slowdown in inflation was observed. “Although the number published by INDEC would be high again,” due to the statistical drag from December, the consulting firm’s projection remains at 25%. For its part, since Labor Capital & Growth (LCG) indicate that “monthly average inflation continues to slow and reaches 23%”.
The consensus in the private sector is that inflation will begin to slow down, which, if confirmed, could lead to lower demand for CER bonds and shift the market’s appetite towards instruments that offer coverage against a devaluation such as the dollar linked (DL), given the expectation of a moderate jump in the exchange rate in April and an accelerated crawling peg from then on.
CER or dollar linked? That is the question
Last week there was demand for currency hedging through bonds dollar linked and duals, which rose 9.6% and 6.3% on average, respectively, as the exchange gap widened, with increases concentrated in the longest titles, explains the research area of IEB Group in a report.
The market seems to be assigning a lower probability of the exchange rate jump in April, since DL bonds maturing after this month, TV24 and T2V4 for example, have been showing more significant advances compared to TV24. “The former have risen 25% and 35% so far this month compared to TV24, which only rose by 5.7%”, they add from Investing in the Stock Market.
In relation to the CER curve, the most important increases They concentrated on the long stretch, while maturities prior to the fourth quarter of this year had more moderate increases of around 2%. The truth is that last week The CER bonds had a strong correction to which the dual and DL bonds were added, with the longest titles falling up to 3%. “This suggests that the market seems be recalibrating inflation expectations downwards for this year,” warns the broker.
“So far this year, dollar linked and dual bonds have been the best performers”says the document. This, despite the fact that they continue to have negative returns in real terms as well as measured against the CCL, which advanced a little more than 30% in the month.
On the other hand, although the DL curve appears not to be pricing in a strong exchange rate adjustment before Aprilfuture dollar contracts seem not to believe that the 2% crawl is maintained until March “since they price a devaluation of around 10% for that month.” Subsequent contracts have implicit exchange rate variations of similar magnitude, so “The market would not seem to be seeing a discrete jump in the official exchange rate either.”, he adds.
Whilethe short part of the CER curve although it corrected somewhat last week, still has high inflation levels in prices for the months of January and February if the yields are compared with the monetary policy rate. “Looking at the TX24 and the T3X4, these price inflations for the first two months of the year of 23% and 18%.”
In the same way, for Econviews the securities market (CER) presents significant changes in the premiums and yields of different bonds, both short and long.
Bonds in pesos: in which instrument is there more appetite then?
Di Giornofrom Proficio Investment, explains that after the latest data that was released referring to high-frequency inflation in recent weeks, the expectation of an acceleration moderatedwhich led to part of the flow of funds that went to CER securities going towards the linked dollar motivated for several reasons. Among them stands out: “The increase in the gap between the official dollar and financial dollars, which adds incentive to position yourself in these instruments that did not present returns as negative as those adjusted for inflation.”
For Adrian Yarde Bullerchief strategist of Facimex SecuritiesFor the moment, the trend remains the CER curve. “Looking at the fund flows of the FCI industry, it is seen that in the last five wheels CER funds received net subscriptions of almost $160 billion and dollar linked funds suffered net redemptions of almost $80 billion”, he assures.
Beyond this, the analyst confirms that Yes, changes are being seen in the relative valuation of the peso curvesespecially in that of CER bonds, “which is adjusting to high frequency price data that has been suggesting that January inflation will be closer to 20% than 25%.”
New tender in sight: this Tuesday, January 30
In that same line it is expressed Andrés Reschinianalyst at F2 Soluciones Financieras, who maintains that, at least yet, he does not perceive that investors are migrating towards DL, “If not the opposite”.
Reschini explains that it is true that the CERs eased a little, as inflation expectations have subsided, “But even so, with crawling going at 2% monthly, the investor, between CER and DL, continues to prefer the former.”
The analyst recalls that, in fact, the Ministry of Economy announced a new debt tender in which the instruments that involve you are precisely three titles that adjust by CER and starts this Tuesday, January 30.
Thus, while the market adjusts its view of the race between inflation and the dollar for the next 90 daysit is anticipated that price dynamics will be the dominant factor, so instruments that adjust for inflation They are the ones that continue to have the greatest attraction for the investoralthough some are already beginning to look at DL as a future hedging instrument.
Source: Ambito
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