The bond market in hard currency thus chained its sixth consecutive day with a clear negative trend, those of this Monday were led by Global 2035 (-7.4%); Global 2029 (-4%); and Global 2038 (-3.8%). Among the Bonares, the casualties reached 3.2% (Bonar 2030).
“The decline in the market is worrying, buyers do not appear because the indicators of the inflationary economy and internal political problems grow daily”synthesized a banking analyst.
Fuente: Gold Values.
Thus, the argentine country risk measured by the JP.Morgan bank, it renewed its historical maximum levels (since the new bonds began to operate in September 2020), rising 4% to 2,451 basis points.
Faced with the constant flight of currency, largely due to energy imports, the BCRA had to take measures of new exchange restrictions and thus managed to add some US$250 million to its weak reserves (this Monday the energy import payment remained in the order of 100 million dollars).
“It is difficult to stabilize like this. The BCRA’s measures can help marginally, but they also raise questions about the future. This also reflects on short-term responses,” commented to Area the economist and former Secretary of Finance, Daniel Marx.
For the economist and director of Anker Latin America, Federico Furiase, the hardening of stocks “was expected” in the face of exchange rate tension, although he warned that the measure it will bring about “less activity” and “more inflation” due to the increase in the replacement cost of merchandise.
Doubts among investors lie in the improbability that Argentina will be able to meet the quarterly goals recently agreed upon before the International Monetary Fund (IMF) by renegotiating some 44,000 million dollars, through the requirement to accumulate reserves, reduce the fiscal deficit and lower inflation, among others.
“The deterioration of the fiscal numbers, with a deficit of 0.25% of the GDP in May, the expansive monetary dynamics and the lack of accumulation of foreign currency by the Central Bank (BCRA) cast doubt on the fulfillment of the goals with the IMF” , they said from Portfolio Personal Investments.
On the other hand, and after the intervention of the Central Bank and ANSES, CER-adjusted securities in pesos rebounded up to 10.1% (TX24) after the strong liquidation in recent weeks. According to market estimates, the BCRA has already issued almost 500,000 million pesos to support the prices of bonds in pesos.
The most relevant increases were recorded by Boncer 2024 (+10.1%); the Boncer 2023 (TC23 +3.6%); and the Boncer 2026 (+3.3%).
“This dynamic of continuous issuance to support the prices of debt in pesos is generating an additional risk in the goods and free dollar markets. Indeed, the magnitude of the issuance is significant enough that it can be potentially very destabilizing in a context of falling demand for pesos”, warned from Aurum Valores.
Before a key auction for the Treasury that will take place this Tuesday, and after the recent sharp falls in titles in pesos, The president of the Central Bank, Miguel Pesce, promised this Monday to implement as soon as possible a line of liquidity of Treasury instruments for use by mutual funds.
“We are analyzing different alternatives so that they work as a reassurance that the BCRA will operate on the curve to guarantee the liquidity of Treasury instruments and the support of their prices”Fish said.
The head of the Central met with Valentín Galardi, president of the Argentine Chamber of Common Investment Funds (CAFCI) and industry representatives, who they coincided with the strategy and valued the intervention of the BCRA in the securities market, indicated sources from the monetary authority.
“Attention continues to be focused not only on the evolution of net reserves towards the second half, but also on the possibility of recovering the appetite for local debt (…) since the auctions are the only voluntary financing available to avoid untimely speed up the pace of monetary issuance in the face of already high inflation,” said Gustavo Ber.
The Ministry of Economy will carry out this Tuesday a tender for treasury titles in which it will seek to cover maturities for some $243 billion. In the last two days, it managed to reduce debt maturities to only 40% of the initial total, after swap operations for $362.5 billion.
S&P Merval y ADRs
In the Buenos Aires bag, the S&P Merval index advanced 3.8%, to 85,712.27 units, against a loss of 6.6% in the previous five days, driven by the strong rise in the CCL dollar, which jumped 3% to $245. In the parallel market, the blue dollar jumped $6 (+2.7%) to $232, in a segment with reduced business and a widening of the gap to 86% before the official market.
“The injection of pesos that the BCRA is carrying out plus the obstacles to imports create a more complicated exchange rate climate,” they remarked from Aurum Valores.
Under this panorama, the actions that rose the most in the wheel were those of the energy sector: Pampa Energía climbed 12.5%; Transportadora de Gas del Sur gained 6.7%; YPF added 6.6%; Transportadora de Gas del Norte increased 4.6%; and Cresud rose 4.4%. The only five losses were scored by Mirgor (-1.9%); Alua (-1.3%); BYMA (-0.7%); Securities Financial Group (-0.3%); and Telecom Argentina (-0.02%).
On Wall Street, meanwhile, the ADRs closed with the majority of increases, which were also led by Marcelo Mindlin’s energy holding company (+8.3%), after Morgan Stanley indicated in a recent report that it will raise the recommendation on its ADRs to overweight from equal weight.
The panel of majors was completed by Vista Energy (+5.5%); YPF (+5%); Central Port (+3.6%); and IRSA (+3.4%). On the contrary, the casualties corresponded to the papers of Edenor (-6.7%); Free Market (-3%); Globant (-1.6%); Telecom (-1.5%); and Take off (-0.9%).
The boost on energy came from the price of oil, which rose again on Monday in a market that got used to the idea of a global economic slowdown and is once again concentrating on the supply of crude oil, which continues to fail to meet demand.
The price of a barrel of North Sea Brent for August delivery thus rose 1.74% to $115.09 in London. Meanwhile, the West Texas Intermediate (WTI) for the same delivery rose 1.81% to 109.57 dollars in New York.
According to Daniel Ghali of TD Securities, the market is coming out of a dynamic in which “recession fears were the catalyst for sales in recent weeks.” On Wednesday, WTI touched 100 dollars.
“The market is ready for a rebound,” Ghali said, citing the lag between the recent drop in crude prices and gasoline and diesel prices remaining at historically high levels.
For their part, US stocks closed lower, with little support for investor confidence, as they approached the halfway point of a year in which stock markets have been battered by growing concerns about inflation and tightening. of the Fed’s monetary policy.
The S&P 500 lost 0.3% to 3,900.05 while the Nasdaq fell 0.9% to 11,501.92. The Dow Jones Industrial Average fell 0.2% to 31,445.11.
The main US stock indices lost ground after swinging early in the session, and the Weakness in interest rate-sensitive mega-caps like Amazon.com, Microsoft Corp and Alphabet Inc was the biggest drag.
“The reason for the lack of direction this week and next is that investors are watching what is going to happen in the second quarter,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
All three indices are on track to record two consecutive quarterly declines for the first time since 2015. It also seems that they are going to close June with losses, which would mean three consecutive months of declines for the tech-heavy Nasdaq, its longest losing streak since 2015. And eThe S&P was on track to report its fifth worst year-to-date decline from 1962 through Friday, Stovall said.
Rising oil prices helped push energy stocks to the forefront, while smaller economically sensitive stocks and semi-conductor and transportation stocks also outperformed the broader market.
Economic data surprised to the upside as new durable goods orders and pending home sales beat expectations and added credence to Fed Chairman Jerome Powell’s claim that the economy is robust enough to withstand central bank measures to curb inflation.