The market gave a moderate pause to the Minister of Economy, Silvina Batakis, with dollar prices. The drop in AL30 (-1.07%) and GD30 (-1.57%) bonds, which are used to buy and sell financial dollars, plus telephone suggestions to stockbrokers to moderate movements to follow the speech, were key factors in setting prices one notch lower.
That is why the amount of business was reduced by just over 10%. The cash with liquidation traded USD 104.3 million and the MEP, USD 94.2 million, adding a volume of almost USD 200 million. Each reduced their operations by around USD 12 million. On Friday they had operated more than USD 200 million between them.
The MEP dollar lost $3.6 (-1.2%) to $285.69 and the spot dollar with settlement, $3.4 (-1.1%). The gap or cable between the two continues at 4.5%. The free dollar, which has a strong psychological effect, moved USD 7 million for the “mash” sellers, those who bought the quota of USD 200 in the banks, and yielded $5 to $269.
Politics always looks at the “blue”, but when imports are limited, the dollar that influences is the cash with liquidation because it is an operation that allows converting pesos into dollars and putting them in a foreign account.
In the wholesale market, where the dollar rose 57 cents to $127.36 cents to compensate for the weekend, the Central Bank was able to buy USD 80 million, sacrificing importers. Reserves, despite purchases, increased by only 5 million to USD 40,456 million.
“Dollars had a particular evolution. The cash with liquidation opened 3.3% down, but as the hours passed, investors relaxed and went out to buy, so they cut losses to 1.1%, “said the financial analyst Franco Tealdi who added that “the market wants to see to believe because it has heard these announcements on other occasions.”
The Central Bank does not want the bonds to arrive weak at tomorrow’s Treasury auction, despite the prudent statements of the new minister.
The truth is that the monetary authority bought around $100,000 million from Boncer and Lecer. Compared to previous interventions it was moderate. The operation caused the TX23 to rise 3.76% and the TX24, 4.02%. In this way, the most demanded title, the TX23, now yields 3.5% above inflation.
Approval of the new minister’s proposals was relative. The slight declines in all dollars was the logical pause, since they were advanced in their prices due to the bad expectations they had.
The arbiter of the price of foreign currency will be tomorrow’s Treasury Bill tender, where the Ministry of Finance should receive at least $150,000 million, to feel sure of covering the maturities of the month of just over $400,000 million, of which 73% are in the hands of Anses.
The instruments are very short term. For the Investment Funds, they will issue an exclusive Discount Letter that expires on August 11. For the rest of the investors, a Discount Letter will be tendered with maturity on October 31 and a bond linked dollar -tied to the price of the dollar with maturity on July 31, 2023. A bond in pesos that expires in May 2027 and that will end up in the hands of the official sector will not be missing from the menu.
But the Central Bank took an instrument to keep issued pesos under the rug. The market baptized the new measure as “the put Pesce” and consists of assuring the banks that, if the Treasury does not pay the bonds in a timely manner, the Central will repurchase them. To do this, they sign a contract for which they will pay 2% per year as the cost of exchanging the Treasury Risk for the Central Bank Risk, which is the one that banks find most comfortable.
Debt bonds fell significantly and raised country risk by 19 units (+0.7%) to 2,667 basis points.
The stock market had a negative day. With operations for $1,179 million, the S&P Merval, the leading stock index, lost 1.33% in pesos and 0.2% in dollars.
The ADR’s -share holding certificates that operate on the New York Stock Exchange- traded no less than $6,679 million. The high amount is due to the fact that they are operations that are carried out in pesos and are quoted at the dollar price with liquidation. For today the market is expected to remain on the defensive. Support for Batakis’s statements was not overwhelming and there are dollar buyers on the prowl.
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