Despite the historical defeat of the ruling party in the province of Buenos Aires and the strong initial shake in dollar, bonds and shares, the markets managed to stabilize rapidly. The combination of fiscal surplus, successful debt rollover and low rates allowed to dissipate fear of a crisis and a more orderly post-electoral scenario is not ruled out.
On Sunday, September 7, left a historical result in the Province of Buenos Aires (PBA): The ruling party suffered a defeat with a difference that exceeded all projections and comforted the political scene for October. The market reaction was hard: the dollar exceeded $ 1,470, the average 15% fall shares and the GD35 bonus perforated the US $ 70. The country risk even jumped above 1,100 basic points. However, the tension dissipated. What changed?
The fundamentals gave a key victory to the government. During the week, the market showed recovery signals. The dollar moved again within the bands established by the Central Bank, the Government achieved a Rollover greater than 90% in the bidding of debt on Wednesdayand interest rates began to go down. Although the futures marked moderate increases, the trend was containment.
The economic foundations accompanied this reaction. Inflation slowed down And in August it was 1.9%, while core inflation went from 1.5% in July to 2.0% in August. Despite the recent increase of the dollar, the Passthrough remained at moderate levels, avoiding a transfer at prices.
On the fiscal level, the public accounts showed a change in tendency: in the first seven months of 2025 a Primary surplus of $ 9.43 billion and a financial surplus of $ 2.92 billion. If the official projections were fulfilled, the year would close with a primary surplus equivalent to 1.3% of GDP, consolidating the equilibrium goal.
In the weeks prior to the elections, volatility led many investors to disarm positions in bonds and actions to take advantage of 80% rates or dollarize in the face of uncertainty. However, I recommend not getting carried away by short -term impulses.
Investments in pesos are recommended for profiles with greater volatility tolerance since the returns measured in dollars can suffer short -term fluctuations due to exchange rate movements.
The Bonds in pesos With maturities in 2025/2026 they continue to offer effective rates close to 3% monthly, in line with inflation. Likewise, CER bonds are negotiated in real rates such as CER +20%/25% that can be a very attractive opportunity but already thinking about the long term.
For those who have positions in dollars, the offer of instruments continues to grow, driven by laundering and increased deposits in foreign currency.
Among the most conservative options are:
- Money market funds in dollars which offer daily liquidity to nominal rates close to 3%.
- Bopreal bondswhich they offer showed being more defensive to volatility increases and an 11% yield with expiration in 2027.
For profiles with greater risk tolerance, share market It is still attractive thinking about the long term, especially in a scenario of economic growth and recomposition of expectations.
Traffic to the end of October seems quite clear. However, government challenges are to establish clearer policies, continue with the strengthening of reserves and above all things the reactivation of economic activation.
Although it is not ruled out that volatility intensify in the coming weeks, the signal that the market left is that the electoral shock did not result in a crisis. The combination of exchange stability, low rates and macroeconomic indicators in recovery does not rule out a more orderly post-electoral scenario.
In times of uncertainty, diversification and patience are the best ally to invest.
ASSET MANAGEMENT CIO ADCAP Financial Group
Source: Ambito
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