Although they have moderated in recent weeks, Fixed-rate peso securities showed significant increases in Novemberespecially in the long stretch, and deepened the inversion of the curve. The movement is consistent with prevailing optimism among investors regarding the continued slowdown in inflation. Although, for the short term, this optimism is higher than that of the main consulting firms private of the city.
The call “inflation breakeven”which is obtained by estimating what level of CPI would allow the yields of securities in pesos at a fixed rate to be equated (Lecap and Boncap) with the bonds indexed by CER (Boncer), was located at the end of last month at a average of 2.4% monthly for the last two months.
“Given the seasonality of prices at this time and high frequency data from November, a priori, looks a little optimistic“said Portfolio Personal Investments (PPI) in its weekly report in reference to the inflation expectations implicit in the prices of these assets.
Inflation: what do the consulting firms say?
PPI’s statement coincides with what they estimated the consultants that follow the evolution of prices weekly. Most even They calculated that November closed with a small rebound compared to 2.7% that INDEC reported for October.
For case, Eco Go and Freedom and Progress They measured inflation close to 3% for last month; Orlando Ferreres and Associates, 3.5%. Instead, C&T Advisors It revealed 2.6% for the CPI of Greater Buenos Aires, which in any case is higher than the 2.4% of “breakeven inflation.”
One of the reasons that consultants point out is the rise in regulated prices (such as utility rates) and the highest seasonality compared to October, something that will also impact December. In the last part of the year the increase in the meat vaccine before the holidays. In that sense, The consulting firms predict a December in which the CPI will hardly stray far from the 3% zone.
Lecap and Boncap: the fixed rate curve steepens
Throughout November, the biggest increases were seen in fixed-rate securities, although debt in pesos showed significant gains in all segments. The Boncap (the longest securities on the fixed rate curve) climbed up to 8% during the montheven though in the last week they stopped the escalation and returned part of the previous advance.
“The Lecap They fell 0.2% in the last five rounds, but accumulated an advance of 4.9% in November. The TO26, on the other hand, although it showed a weekly decrease of 0.9%, presented a total increase of 11.3% monthly,” stated a report from Cohen.
“In the month-on-month comparison, the TEMs (monthly effective rates) not only moved downwards but also they steepened the negative slope of the curve. At the end of November the TEMs were in the range of 3.1% and 2.6%, while at the end of October they were at 3.3% and 3%,” highlighted PPI.
For their part, the CER titles They also had a positive month. Again, the long leg was the most notable: there were increases of up to 10% and 15% in the Par and Quasi-Par. “It is interesting to note that a month ago, the curve showed yields above the CER plus 10% in almost all of its sections, while now all instruments yield below the CER plus 9%,” PPI added.
This Monday, in the first round of December, the Lecap operated with limited and mixed movements, although with most rises. The Boncaps, after half a round, were trading slightly lower.
Source: Ambito
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