Optimism seems to be sustained for another session for the fixed income segment. What are the factors that drive the rally?
The dollar-nominated bonds add another session and, before the market opens, climb up to 0.8% this Tuesday October 29so the country risk pierce the 900 basis points and minimum mark since August 2019.
It happens that investor optimism comes after a positive fiscal result, signs of a decline in inflationthe recent monetary support from international organizations, broad compliance with a money laundering and Dollar purchases by the Central Bank (BCRA) create a favorable climate for investors.
The dollar bonds rise accordingly up to 0.8%, headed by the Global 2030 – GD30 (+0.8%); Global 2046 – GD46 (+0.7%) and the Global 2029 – GD29 (+0.7%). In this session, the country risk measured by JP Morgan marks 893 basis points and pierces 900 points for the first time in just under five years.
The fundamentals of the decline
Given this panorama, from Outlier, Gabriel Camaño’s consultancy, ratified its recommendation that We are in the profit-taking zone, Mainly, for the most risky profiles. Weighted debt continued at maximum levels and ended at 62.8 (+2.06%).
The consulting firm points out in its daily report that, with a country risk close to 900, sees a slower journey from now on and, although we do not rule out a scenario of 750-800 country risk points. “We understand that, given the path taken up to this point, there could be a lateralization or adjustment. Returning to the path, the dynamics of the sovereign debt have been supported, in a good part of its last upward path, by a favorable context. We see that In recent rounds there has been a lack of correlation between the weighted debt and a “proxy”, such as the EMB, recalculated based on the mobile beta against it,” they say.
News in development.-
Source: Ambito
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