Key for investors: where the pesos are going after the latest drop in rates and volatility of the blue dollar

With attention focused on the Law Basesthe market continues to capture the positive signals coming from the Government to recalibrate the investment compass and rearrange portfolios. It is worth remembering that, last week, after the announcement that inflation fell to single digits in April, the economic team led by Luis Caputo deepened the liquefaction strategy with the Central Bank (BCRA), cutting the monetary policy rate for the sixth time since the arrival of Javier Milei to the power.

This BCRA decision has a full impact on the savings vehicles most popular among Argentines, as they are mainly time deposits (PF) traditional, in addition to money market funds (MM, T+0). The Central’s intention is to encourage investors to stay away from those instruments (PF and MM, mainly) and, instead, opt for Funds that place in fixed income assets and CER titles, and redistribute those resources towards instruments with overnight settlement (T+1)in order to take advantage of the returns offered by the Lecaps, available through the Ministry of Finance.

Likewise, volatility has been observed in the exchange market, with a rebound in the value of the Dolar blue. However, the Government tried to bring calm by conveying the idea that the exchange rate remains almost stable, and rejecting the diagnosis that there is an exchange rate delay. This is reflected in the contracts of future dollarwhich yield in almost all their terms and the increase by the end of the year is marginal (+0.4%).

In this way, and with the last drop in the interest rate, A new rearrangement took place. According to the analysts consulted by Ambit, flows began to be seen that were channeled into “cash management“, Like the Money Market and T+1. Likewise, they highlight that another part of the capital, of those who had a longer time horizon, migrated to CER funds. Especially in the medium and long stretch, where you can see more attractive returns.

The investor strategy

As well explained Thomas Ambrosettidirector of Guardian Capital, in statements to this medium, foreseeing rate cuts by the Central Bank, the market was opting for fixed rate investments to ensure these returns over time. The strategist maintains that strong demand has been going on for weeks “It comes from fixed rate instruments such as Lecaps: capitalization bills that are purchased at a discount“.

And he adds that, “when they began to operate in the first months of the year, the investor could close a 7% monthly rate. Now we are at values ​​close to 3.5% monthly interest, well he Treasure was bidding for these instruments with expirations in almost every month of the year”.

Rafael Di Giorno, director of Proficio Investment, also expresses himself along the same lines, and maintains that among the factors that determine market positioning there are several of them that bid on opposite directions. On the one hand, the lowering of rates by the BCRA pushed quotes on the curve in pesos, “mainly in Lecaps“, and also in the short part of the CER curve.

In second place, Di Giorno slips that the market is more optimistic regarding the disinflation projected by the Survey of Expectations (REM) of the BCRA, which resulted in an increase in the rate yielded by CER securities, and with implicit inflation (break-even) below the scenario proposed in the REM, for the most risky investors “it could be an opportunity“.

Thirdly, it mentions that the decline in the performance of the Lecapsaround 3.2% monthly, made them no longer so attractive for the most conservative investor; This promoted some dollarization in recent days, which would explain the rise in the illegal currency. For more conservative investors, the strategist sees value in Boprealeswhich allow obtaining a higher yield than most negotiable obligations, and coverage against an increase in the exchange rate.

So where are the pesos going?

Emilse Cordobadirector of Bell Stock Market, explains that fixed-term placements, in general, have primarily and initially migrated to mutual funds. This works well for short-term investments, since at the moment the rates yielded by the FCI are still above those of the fixed term, but it warns that, over time, they will converge on similar rates, although the FCI will surely continue up by a few points.

For Córdoba, an investment that is a little more interesting for those who are used to the surety or fixed term, and also short term, They are the Lecapsin line with Di Giorno and Ambrosetti, since they are yielding 4% per month (vs. fixed term that can yield 3% per month AT MAXIMUM). The analyst affirms that if the interests are capitalized and it is projected for one year, the rate is much more interesting. All this for investors who are looking at the pesos.

On the other hand, for Córdoba, the bonds continue to be attractive, since it turns out that soon They will be paying interest and some amortizing a portion of the capital. “In this sense, for example, with the AL30“Taking into account the current price, you are collecting interest and capital amortization on July 9, which represents almost 8% of the investment in just two months,” he points out.

For Ambrosetti, meanwhile, The best investment for those who want short-term returns in pesos is to position themselves in these Treasury bills, instead of money market funds that earn the reference rate. “We are exiting positions in T+0 funds to position ourselves in T+1 funds that contain this type of bonds“.

But as mentioned in the first lines of this note, the current time is a time in which the investor must closely follow the political scenario, which is what could change, for better or worse, and very quickly financial dollar quotes.