Wall Street speaks: What reaction is expected in ADRS and bonds after Javier Milei’s speech in Congress

“I consider that on average There will be a positive market response, especially in bonds regarding the president’s speech. Clear guidelines on the trajectory of the macro, the agreement with the IMF, reforms and stocks and a continuity of the reform plan. However, the message of leaving Mercosur, the main ally of Argentina, could negativity in some ADRs that have direct linking, such as Loma Negra, “said economist Federico Glustein in dialogue with Scope.

For his part, Fernando Marull, Fmya’s partner, described Milei’s speech as “positive” and stressed that the progress in negotiations with the IMF will be a key factor to boost the market. “There is still a specific step,” he said in reference to the president’s mention on the agreement.

Elena Alonso, CEO of Emerald Capital, stressed that Milei’s speech on a tax reform is in tune with the Private sector expectations to boost economic growth. “While this year it will be complex and highly volatile, I do not think it has a significant impact on the actions and bonds that are quoted abroad. However, we must be attentive when we are closer to the agreement with the IMF. On average, I estimate that Argentine assets will go up“He contributed.

Bonds and Actions: The IMF is now more urgent

Politics was a factor determinant in the evolution of Argentine assets during February. The $ Libra scandal, the controversy around the appointment by decree of judges in the Supreme Court and the growing uncertainty on the exchange front front They generated a little conducive climate for optimismhindering the recovery of losses towards the end of the month. This joined two negative signals at the financial level that show some exhaustion of the tools that had been operating until a few months ago: the raised rise that marked the need to sustain the demand for weights to avoid exchange volatility, and the need to “burn” BCRA reserves To keep financial dollars stable.

The selling pressure on the bonds began after the maximum reached on January 9 after the payment of coupons. Since then, a series of factors led investors to take refuge in more conservative assets. “The investors positioned in Argentina expected the announcement of an agreement with the IMF that would bring relief against the maturities that the Treasury must face. However, the lack of concrete advances reduced the expectations about the scope of the program, both in terms of the amount and the immediate availability of the funds. To this the volatility that generate in the global markets the tariff ads of Trump were added,” they said since Trump’s tariffs said ADCAP Financial Group.

From Max Capital, meanwhile, another key fact said: in February Local companies increased their exposure to bonds in pesos And in dollars, While foreign investors opted for caution. “In the bonds in pesos, foreign investors reduced their tenure at the lowest level since 2019, while local players absorbed the entire increase. In the case of dollar bonds, the premises became a more relevant role, increasing their 21% participation in the third quarter of 2020 (after the last debt exchange) to 39.7% in the third quarter of 2024 Local wallets could be aggravated if the Happy real rates validate and the restrictions are lifted, “they warned.

In the short term, the market indicates that the agreement with the IMF It should reduce uncertainty in exchange scene due to access to fundsand for a road map towards the exit of the exchange rate, which provides greater peace of mind.

From Econviews They synthesized impatience in a title that left no doubt in their latest report: “The second half is complicated: that between the IMF”. According to the consultant, the agreement would favor market confidence, since together with the two aforementioned factors, they will be “key to calming the nerves, reducing the country risk and ensuring that the transition from the stabilization plan to the next phase is successful,” they said.

For Pablo LazzatiCEO of Insider Finance, the agreement with the IMF, although it still has no amount or clear date, would be a “driver” positive for the Argentine economy. “And as the market is usually advanced to the impact of events on the economy on Monday, the ADRs would have a positive opening also driven by President Milei’s message in his speech on Saturday night,” he said.

“The president spoke again of the agreement with the IMF but this time he used some words that he implied that we will have news in the next few days, with the aim of lifting the stocks for this year. This can lead to a rise in Argentine shares, mainly oil or the banking sector (YPF, Galicia) as well as the sovereign bonds in dollars,” said the economist Andrés Salinas.