The placement will be done next Tuesday. $1.6 billion expires. The surprise is that the menu only includes indexed bonds. What signal is the Government seeking to give?
The Ministry of Economy called a new debt tender in pesos for him next tuesdayin which he will face maturities for $1.6 trilliona more limited amount than in previous auctions. The surprise in the city came with the menu of titles offered: there is no Lecap on the tableonly inflation-indexed bonds. Thus, the team Luis Caputo avoids giving a definition of rateswhich was expected by operators and analysts after the compression of returns in the secondary market.
The call for bids from the Ministry of Finance included four titles tied to inflation (Boncer). Three new bonds will be launched: one in May 2025, another in October of next year and another in October 2026. In addition, the Boncer will be reopened in March 2026. All are auctioned by price (which will be defined in the placement) and They pay 0% coupon.
The novelty is that On this occasion there will be no capitalizable bills or bonds at a fixed ratewhich were in high demand on the secondary market in recent weeks. Especially the long stretch, which compressed their rates and led to an inversion of the yield curve.
Those moves reflected growing investor expectations that the path of inflation slowdown will be prolonged, with an official exchange rate that would continue to be controlled by the Government. A scenario that reinforced bets on the “carry trade”a mechanism that is promoted by the economic team itself as part of its macro scheme since it stimulates the liquidation of foreign currency from exporters and credits in dollars.
So, There was expectation in the market about what the Economy would do with the interest rates of the Lecap and the Boncap in the next tender: whether it would validate the movements of the secondary market or whether it would set higher levels to give a signal of continuity of the carry. Ultimately, he chose not to offer them.
What signal is Luis Caputo seeking to give?
Among the first reactions of the operatorsmany interpreted that the economic team sought to send a a sign that official offices expect inflation to continue falling and, therefore, they prefer (before maturities not so large) not issue at current rate levels of the market, despite the recent compression. Federico Furiase, director of the Central Bank, retweeted two posts on the social network
In dialogue with Scope, Javier Casabalfixed income strategist at Adcap, expressed his view on the matter: “Following the idea that the market was seeing that inflation would yield to 2/2.5% monthly in the short term and that then long rates would be fought of 3.5% (which were going to appear as a very good deal), it seems to me that The Treasury is trying to give the impression of scarcity of fixed rates. “That the market begins to flatten, to demand more strongly the entire curve, and that this continues to support the ‘carry trade'”.
Source: Ambito
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