The market takes note of the political noise and punishes Argentine assets, which begin the week with cuts in the main sovereign bonds,
The dollar-denominated bonds The last week of August began with new declines. With its eyes on local politics after the recent defeats of the ruling party in Congress, where it has a parliamentary minority, analysts estimate that the market will undoubtedly take note of this.
Thus, sovereign bonds are extending the negative trend, led by the Bonar 2035 (AL35), which is down 1.3%; followed by the Global 2030, which is down 0.4%, and the Global 2038, which is down 0.1%.
It so happens that Congress recently approved a pension increase, which was vetoed by President Javier Milei arguing that it affects fiscal balance, after parliament rejected a presidential decree that multiplied the budget of the local intelligence service (SIDE) arguing that it could be used to address social needs.
Milei assumed the presidency last December with the intention of defeating inflation, maintaining a balance in the country’s fiscal accounts and freeing up the foreign exchange market, among other campaign points.
“Beyond the fiscal cost of the measure, the veto carries a political cost that is difficult to estimate for the president, while it strains the relationship with the opposition for future bills,” said Portfolio Personal Inversiones. “It is not an easy decision for the government, since it puts an economic anchor in tension with a political one: the fiscal one and, perhaps most importantly, that of the president’s image,” he added.
“In the short term, the market will be looking at the developments regarding the opposition’s retirement formula approved by Congress, high-frequency data suggesting that disinflation is losing strength, and the dynamics of external accounts and alternative FX (dollars),” said the SBS Group.
News in development.-
Source: Ambito
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