S&P Merval rises as the Government begins the transfer of debt from the BCRA to the Treasury

The Argentine stocks on Wall Street are trading up by up to 3%, as are dollar bonds.

In that context, the leading index S&P Merval of the Buenos Aires stock market rises 0.6%, to 1,699,349.66 units, a day after having recorded its previous all-time high in 1,691,343.68 points due to buybacks led by financial and energy stocks. At the start of the session, the market touched an intraday record of 1,702,668.10 units.

Apart from the condition of the high inflationthe financial market is moving amid sustained downward pressure on its battered peso, so from the libertarian administration Javier Milei The aim is to demonstrate convergence towards a massive liberalisation of the economy that will enable us to emerge from the recession.

The BCRA begins the debt swap with the Treasury

“We are in recovery stage, we left intensive care (…) The free exchange rate will converge with the official rate due to scarcity and that will be a more appropriate time to get out of the ‘cepo’ (restrictions),” said the Minister of Economy, Luis Caputo, in radio statements.

At the same time, The Treasury was authorized to exchange public debt instruments with the BCRA for the so-called Liquidity Fiscal Letters (Lefis)which will be capitalized daily while they can only be negotiated between the monetary authority and the banks of the national system.

Days ago the parties announced that The remunerated liabilities of the BCRA would be transferred to the Treasury as part of a general reorganization of the financial system, which led to a massive dismantling of banks’ positions in favor of liquidity and this helped to put even more pressure on the prevailing demand for dollars as portfolio coverage. Currently, the BCRA’s reference rate is set at 40% per year.

Waiting for the inflation data

This week, Milei signed a plan of intentions for national development together with provincial governors, with the idea of ​​seeking support for his orthodox economic program, which drags rampant inflation and escalating poverty.

The Consumer Price Index (CPI) would have recorded a variation of 5.1% in Juneaccording to the median of a Reuters poll, and a day before it was made official, Caputo expressed hope that “I hope that tomorrow (Friday) inflation will be below 5%. Core inflation should start at 3.”

The interbank peso remained with a controlled devaluation in the order of 0.11% to 920 for every dollar, at a time when the BCRA is having a hard time adding reserves, while the currency in the influential marginal (“blue”) market operates at its historic low of 1,450 units, which implies a jump in the exchange rate gap to 57.6%.

Bonds and ADRs

The dollar bonds operate with a majority of increases of up to 2%, led by the Global 2029 and followed by the Global 2046 (+0.9%) and the Bonar 2035 (+0.8%). Meanwhile, the Global 2038 falls 1.6%he Global 2035 (-1.1%) and the Global 2030 (-0.1%).

In this context, the risk country It remains in 1.477 basis points, as measured by JP Morgan.

For their part, the Argentine stocks listed in New York operate with a majority of increases, those that advance the most are those of Black Hill (+3.1%)followed by Edenor (+3%), Central Port (+1.8%) and IRSA (+1.6%). The only ones who go down are Despegar.com (-2.2%), Banco Macro (-1.6%) and BBVA (-0.3%).