Milei, who took office in December, has a minority in both legislative chambers and this forces him to negotiate each bill, at times when he is fighting for a massive state deregulation. “The Uncertainty is total and the political context does not help Not at all. What happened yesterday in Congress, although it is something that can happen, is not the most convenient and, in that sense, The Government forgets that it does not have a majority in Congress and must reach a consensus,” says to Scope the financial analyst Leonardo Svirsky.
For its part, from the team of Research from Bull Market Broker indicates that, “on the one hand, we see the effect of profit-taking due to the previous strong increases.” They also indicate that “It is normal for the market to retreat a little after yesterday’s events in Congress, which did not please much, mainly because of concerns about governability.”
On the other hand, it raises doubts in the market situation of international reserves, which affect the value of bonds.
Reserves and the capital market
“The outlook for reserves is complicated by the overall situation regarding the extension of the release from the cepo. In turn, yesterday the United States courts ruled against the country in the case of the expropriation of Aerolíneas Argentinas in 2008 and authorized the ICSID to execute a debt that Argentina has for US$340 million. Although the amount may seem relatively small, This adds to the list of sentences against the country (such as the ruling against the Court of Appeal in London for the GDP Coupon of US$1.5 billion), which deteriorate the outlook for reserve accumulation,” argued PPI.
“There are no major short-term positive catalysts that ensure the sustainability of this streak, which hits sovereign debt in dollars hard. Eventually, With the first figures on the whitewashing process in September, we could see a change in market sentiment regarding reserves,” he explained.
In this context, in the fixed-income segment, dollar bonds fell by up to 2.5% led by the Bonar 2035, followed by the Global 2035 (-2.1%) and the Global 2029 (-1.7%). Thus, the country risk measured by JPMorgan, it loses 36 basis points and stands at 1,553 units, erasing all improvements noted over the last week.
The international variable in the local market
The international context does not help local assets this Thursday either, given that, as the analyst suggests, Eric Paniagua, from Epyca Consultores, “the data from the US is not very encouraging” “because there is a series of economic information, such as unemployment, that is weakening the North American market and all markets around the world.”
S&P Merval and ADRs
The local panel operates with the same negative trend with a fall of 1.9% to 1,589,986.23 points with losses of up to 3.1% led by Cablevisión Holding, followed by Telecom Argentina (-2.9%) and Transportadora Gas del Sur (-2.6%).
On Wall Street, the Argentine papers are trading with declines of up to 4.1% led by Corporación América, Transportadora Gas del Sur (-3.3%) and Telecom Argentina (-3%).
Source: Ambito
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