What is said at the tables: dollar-stock, better not to talk about certain things until after the elections

At a lunch near what was the famous Brokers in the heart of downtown Buenos Aires, two boneros friends – in market jargon they are those who specialize in the fixed income market – commented how this strength of the peso was making the domestic economy more expensive while families lived with a sharp deterioration in their personal income. One of them, recently arrived from New York, who also complained about the prices he paid during his stay, even though New York colleagues had warned him that the Big Apple was now more expensive than London, calmed his complaint after a series of domestic expenses. in Buenos Aires. His colleague who was coming from a “road show” through Baltimore and Philadelphia provided a more banal but eloquent example: He brought some art supplies that cost almost 5 times more in dollars in the country. In other words, it is neither the dollar nor the tariffs, but rather the margins are more than abusive.

Saddlebags full of carry profits

A former head of both operators, now retired but with libertarian ties, joined the table, and the topic of “carry” could not be missed. The veteran waiter commented that most market rates had closed between 3.55% and 3.7% effective monthly while the future dollar continued to decline. According to their calculations, the one-year “synthetic” gave 9% annually considering the dollar in September 2025 and the Treasury Bill capitalizable in pesos in September 2025 (S30S5). It happens that the rates today lower than 40% annual nominal are surprising and since the future dollar curve does not steepen, then the market agrees with the official discourse of not devaluing and convergence of the CCL dollar to the official one. For some this is too much official optimism but The August 2025 contract fell more than 80 mangoes in one monthso betting against it looks risky. The topic was highly debated, given that the diners already had their saddlebags full of carry profits.

What they commented, almost in unison, was that several colleagues from foreign banks and funds who were visiting the Río de la Plata days ago, They took away the strong idea that the Government was not going to do anything with the official exchange rate that would ruin the exchange rate calm and disinflation.At least until after the legislative elections of 2025. In good romance, the stocks will continue to be alive and well. As the Sumo song says, it’s better not to talk about certain things, said the veteran Newman boy.

The “carry trade” is also a topic in a New York forum

The issue of the “carry trade” was not absent from the EMTA forum on Argentina, in New York, where the probability of a new agreement with the IMF, exchange rate policy, the 2025 elections, possible FDI and whether the spread compression could continue. Under the leadership of the former Balanz, today PPI, Walter StoeppelwerthThey crossed swords Ramiro Blazquez Giomi (BancTrust), Pablo Goldberg (BlackRock), Janet He (JPMorgan Asset Management) and S. Waever (Morgan Stanley). That’s as far as the noises linked to rumors about an improvement in Argentina’s positioning in international indices reached, but they were hubbubs around the JPMorgan EMBI+ index. What happened is that a report from the investment bank to clients recalculated the recommendations on emerging fixed income and placed, precisely, the Argentine sovereign debt in “overweight”, that is, overweight in the portfolio. In that box they also put, from the region, Brazil, Ecuador, Panama and the Dominican Republic, in addition to Serbia, Egypt and Senegal. While in “underweight” fell from the region, Uruguay, Paraguay, and Costa Rica, in addition to Angola and Hungary. The argument about the Argentine transfer was the fiscal flank, the implementation of reforms and improvement in the payment capacity next year. An EMTA associate warned that the report was a few weeks old so it had to be considered that the external hands that paid for Argentine bonds in these days are the ones that believe in those arguments.

The tide is changing for emerging companies

Speaking of emerging, the legendary reappeared Mark Mobius, a true expert in the emerging markets club, warning that it seemed that the tide is turning in the Chinese stock market, and since China represents around 30% of the emerging markets benchmark index, Beijing’s latest stimulus measures are likely to boost not just China, but the emerging space in general. Mobius, a frequent visitor to Argentina in the ’90s, considers that this is the time for whatever is necessary for China to save its economy.

At the closing, a group of Latin traders went to an “after” in Chelsea where they commented on the latest Nobel Prize since two of them were students of James Robinson -one of the three awarded by the Swedish academy- in the Master of Economics two decades ago, when he began to evangelize about the importance of institutions for the prosperity of countries. Until that moment, they remember, economic growth was thought of as the result of the accumulation of factors (employment, capital) and the increase in productivity, but Robinson explained to them that political and economic institutions were the missing link that allowed us to explain a substantial part of the growth, the so-called Solow residual.

Between drinks, they recommended that their colleagues read “The narrow hallway”an essential book to understand the desirable role that the State should have in the coming years. Although these “traders” usually look at the short term, today they know that the topic of institutions and their impact on the long-term trajectory of a country generates enormous interest, above all, because it constitutes a powerful tool to successfully predict how the economy of a country will behave in the medium and long term.

Brazil is also the focus of attention now among the EMTA boy’s, especially on the fiscal side. Hence the interest aroused by BCP Securities’ Annual São Paulo Investors Conference, at the Fasano Hotel, which was attended by more than a hundred institutional clients, including Movida Aluguel de Carros, FS Fueling Sustainability, Azul Linhas Aéreas Brasileiras , CSN – Companhia Siderúrgica Nacional, Ambipar, Braskem, Votorantim Cimentos, Nexa Resources and Aegea Saneamento. Based on what they gathered from the event, overall, investor sentiment is cautiously optimistic, with recent new issues in the primary market generating the most interest. At the same time, investors active in both local and offshore markets are beginning to refocus on offshore instruments, given the recent significant compression in international interest rates.