The long stretch has more room to compress, analysts say. Expectations are validating the economic process outlined by the Government.
In the last November tender carried out this Wednesday by the Ministry of Economy, shear rates were between 2.6 and 2.9% TEM depending on instrument and time frame. After the final numbers were known, analysts warn that the peso curve continues “inverted”, which offers signals about what the market expects for 2025 regarding the inflation and the rates ofl Central Bank (BCRA).
Thus, since PPI, after remembering that Economy awarded $5.81 billion in the last tender and received offers for $6.58 billion, they noted: “The Treasury was generous regarding the rates, offer between +10/+14 basis points above the secondary market reference before the auction conditions are known“.
Without looking at the result of the tender, from this analysis they explain that in the secondary market, the Lecaps (longer) and Boncaps reflect TEMs of between 2.55/2.65%, which places this range between 10/15 basis points above the levels of November 19. “From our point of view, we believe that the peso curve will resume negative investment after the noise generated by the reintroduction of fixed rate alternatives in the bidding menu. If so, “The long section has more space to compress.”they expressed.
So, despite the fact that the Government “rewarded” with the rate cut (although they were lower than October), the curve in pesos continues to be inverted. In chat with Scope, Juan AlraPortfolio Manager Southern Trustexplains it like this: “With the surety rate at an average TEM of 2.7%, 2.8% and the Lecaps curve pointing to 3 TEM, it is still inverted. “In accordance with an expectation of lower inflation and lower real rates.” In this way, Alra ensures “the market seems to be very optimistic about the future of the Economy”.
“The inverted curve is marking that the short Lecaps are yielding more than the long ones basically because in the short term and more seasonally in the months we are in, inflation is not expected to slow down so much, but in the future it is expected that inflation will go down, which is why yields also go down, as inflation and the rate go down. of interest,” the economist told this medium Elena Alonso.
What is the implicit inflation in the curve in pesos?
“With the T13F6 cutting at 2.6% TEM and the TZXM6 at CER +8.2% TEA, we can calculate the ‘breakeven’ inflation (which equals the TEA of both instruments) until January 2026” explained from the consulting firm 1816 Thus, they indicated that with secondary market values for the other instruments, “The market has price inflation of 2.5% average monthly for the remainder of the year and 1.6% average monthly for the first 10 months of 2025.”
Thus, according to this analysis, in the primary market cut-off ratesthe inflation that equals the performance of the TZXM6 to that of the T13F6 is 2.1% average monthly between November 2025 and January 2026it suggests that there is relative value in the new Boncap to the cut rate. They explained in this regard that “for the ‘breakeven’ to go to the same 1.3% monthly implicit in the T15D5-TZXD5 pair for the period June 2025 to October 2025, the T13F6 should be quoted around 2.43% TEM” .
Source: Ambito
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