why Argentine bonds and stocks fell in New York / Argentina News


Without operations at the local level for the holiday, domestic assets were punctured abroad and pessimism returned. Lack of certainty is paid

Argentine assets were completely decoupled from the global trend. Without operations in Buenos Aires for the holidays, local bonds and stocks moved in New York and, far from rising to the rally that had Wall street, showed relevant falls. Reds of up to 4.5% were seen on bank papers that trade as American Depositary Receipts (ADRs) while debt bonds lost up to 2%.

The movement of local assets occurred against the US market. The three main indices showed strong increases: the S&P 500 gained 1.40%, the Dow Jones climbed 1.76% and Nasdaq 0.79%. Not even the generalized increases in commodities (something that has a favorable impact on Argentina) did not help the local recovery. Soybeans, which had been “punctured” last week, gained 1.5% to $ 570 per ton.

Doubts over an IMF deal hit domestic assets

Recovery is over

What happened to make stocks and bonds fall off the map? Some operators say that the delay to an agreement with the IMF, which would now happen by 2022, created more tension in the public debt market. Remember that the titles had been recovering in the last month up to 15% (the Global 2046) in dollars against its March lows. And that stocks (like the Macro Bank) gained 8% in hard currency versus last month and 39% versus their lows for the year.

“There was no driver too forceful for them to have improved so much in the last time. The combination of very low prices and the anticipation generated by the Paris Club tour of Europe brought some optimism, “said a broker local. “But that was in the past and without news with the IMF and the closer political calendar, it is doubted whether the country will enter into total default with the Paris Club,” he said.

The news about the meetings of officials with USA last week did not arouse interest for assets either. The United States Department of the Treasury issued a statement after the meeting between the minister Martin Guzman and Treasury officials. The statement emphasized that they focused on the situation in Argentina with the Paris Club and on Argentina’s pending negotiation of a new program with the IMF. Also, that Argentina would have the support of the United States and the international community in a framework of solid economic policy to offer a vision for the growth of employment in the private sector.

For its part, Sergio MassaFrom his tour of the United States, he affirmed that Argentina is well on the way to resolving the negotiation with the IMF. “We continue with important and correct phrases, but without the details that the market needs to consolidate a raise“, he reviewed AdCap Securities.

Legislative elections

This year’s legislative elections are already beginning to hit investors’ spirits

IMF for 2022 and a complicated semester

Thus, the bonds lost up to 2% in their operations in New York. The Globals 2029 and 2030 lost 1.89% and 1.62% respectively. The Global 2046 another 1.65% while the bonds in dollars Argentine law (the Bonares) yielded between 0.50% and 1.80%. Country risk, the indicator prepared by the JP Morgan, rose to 1,502 points and the insurance against a default in Argentina climbed 50 points to 1,824 units.

Morgan stanley (MS), one of the most important entities in the United States, published a document in which it warns that the second semester is going to get more difficult for the country. It affirms that fiscal metrics, the position of international reserves and monetary dynamics are going to deteriorate while the economic policy is submerged in the elections. “Beyond the restructuring, the debt is bigger and mainly in dollars. While the downwind on the bonds should fade, we prefer a neutral position“, they recommend.

“We think the good first half of the year helps politicians get confused during election season, but the second half presents risks. After the November 14 elections, we suspect that the position of foreign exchange reserves will play an important role in the future policy mix.. We see a ‘soft’ IMF program agreed to late in the first quarter of 2022 or early in the second of next year, “Morgan Stanley said Monday.