In recent days, market agents have met Without a compass, disoriented and lacking clues to give direction to business. This January continued to exhibit a low volume of operations and in the last week price drops once again predominated.
The outstanding fact was the collapse of exchange bond prices, the issues of public securities in dollars that came out in September 2020 and are now going through their worst moment.
This Friday the Global bonds registered the tenth consecutive session down. In other words, they lost in each of the operating wheels of this newly released 2022, to accumulate a average red in range 10 to 11 percent.
At their lowest prices since going to market, there are bonds with foreign law, such as the Global 35 (GD35) and the Global 46 (GD46) that are worth less than USD 29, when they were paid over USD 50 16 months ago.
The return rates offered by the bonds in dollars of the short section of the curve touched 27% per year in dollars for issues under Argentine law, and 25% for those under foreign law.
The risk country of JP Morgan, which measures the rate gap of US Treasury bonds with their emerging peers, continued to grow for Argentina, again close to 1,900 points, close to its recent highs from late November.
Are many and strong the arguments that play against the debt titles public. Among them, the distrust of investors to delay, or not achieve, a agreement between the government and the IMF to renegotiate the debt for some USD 45,000 million, the shortage of reserves in the coffers of the Central Bank, the doubts about the strength of economic activity in this 2022 and the absence of a plan that helps to understand what are the objectives that the Government considers in economic matters.
“The possibility of a quick agreement with the Fund vanishes and the lack of progress deepens negative sentiment for debt. Let us remember that the negotiations take place against the clock with payments of USD 2,879 million to the IMF in March, and with reserves in a critical state that increase the probability of a delay in compliance”, they explained from Personal Portfolio Investments.
This week, the data of the monthly variation of the price index to the consumer (CPI) for December. “This data was one of the three highest values of the previous year with 3.8%, surpassed only by the values obtained in March and April of the same year. In this way, the year ended with 50.9% inflation”, commented Priscilla Bruno, analyst of Stock Rava.
For the stocks the week was relatively favorable, if you take into account the collapse of bonds and the adjustment of prices on Wall Street, where the Nasdaq fell 4.8% since the beginning of the year.
The S&P Merval of the Buenos Aires Stock Exchange gained 1.3% in pesos, to stay at 85,481 points, while measured in dollars “counted with liquidation” it gained 2% in five wheels, although it remains negative 0.5% since the beginning of the year.
In the market there was talk of a report from the investment bank Morgan Stanley, who pointed out that the arrangement could be postponed until the second trimester of the year, with a catastrophic scenario if it extends further: without agreement with the IMF, the stock market would collapse more than in the 2019 primaries.
The dollar rose and the gap is still over 100%
The free dollar ended the week traded at $209.50 , with a weekly gain of 1.50 pesos so far in January. with a dollar wholesaler gained 56 cents (+0.5%), at $103.84, the exchange rate gap with the “blue” dollar remained at 101.5 percent.
Gustavo Quintana, from PR Corredores de Cambio, commented that the BCRA “closed the first two weeks of the month without foreign exchange losses due to regulatory actions in the market.”
Although in the last two exchange days the Central Bank did not manage to add foreign currency due to its foreign exchange participation, it maintains an appreciable level of net purchases in the wholesale market, above USD 200 million so far in January, in a period of the year where income from the liquidation of wheat exports grows.