Future dollar: contracts deflate after Javier Milei’s speech, what is the reason?

Future dollar: contracts deflate after Javier Milei’s speech, what is the reason?

A key announcement from the president was expected on Friday in Congress and since it did not arrive, the dollar market reacts accordingly this Monday.

Depositphotos

Markets are very active early this Monday March 4behind the speech by president Javier Milei in the opening sessions of Congress and the contracts of dollar futures that are listed on Matba-Rofex completely reversed the trend they showed on Friday, when they had risen very strongly in a short time.

In the first hours of this day, future dollar contracts fall 5% on average and, as explained by Ambit he Epyca Consultores analyst Joel Lupierithis is because “on Friday he had a very atypical behavior due to speculation that the president would make an announcement regarding dollarization.”

“Basically it went down because the market works by expectations and Javier Milei did not give the expected economic signals,” says the Economist Federido Glustein. He warns that “a lot is being played with voices on social networks, supposedly very close to the president and the Economy, who sell rumors that the market buys and, when that is not confirmed, strong falls come.”

Why futures contracts are going down

That last day of last week was the scene of a 5% rise in the contracts of future dollar which occurred in just half an hour and, since the expected announcement “did not materialize, now the price is deflated,” says Lupieri.

Glustein explains that, since there has been no announcement of monetary politics That Friday, the market had to regulate.

Thus, the aforementioned downward trend is confirmed this Monday in future dollar contracts for March – DLR/MAR24 (-5.6%) and April – DLR/APR24 (-5.08%) of this year. Meanwhile, also those in May they fell 3.85% and the DLR/JUN24 lose 1.07%.

The market was “priced” again during these hours a dollar of $877 for the current month, $935 for the next one and places it at $1,000 for May. While the expectation is that it will be around $1,108 in June and $1,185 in July.

Glustein points out that All reactions will be in line with a zero possibility of dollarization, at least in the short term. “I think it also plays a lot into the fact that the market trusts the more political announcements of the Government and that also helps,” he says.

Thus, it is to be expected that the market’s positive view of the May Pact that the Government announced this Friday helps these cuts and other variables, such as financial dollars and all exchange rates, stabilize.

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts