US financial markets close this Thursday for the Thanksgiving holiday. Therefore, the domestic stock market operates with few variations, without the Wall Street reference.
After a legislative defeat on November 14, the president Alberto Fernandez assured that he will send to Congress a “multi-year” plan in order to close negotiations with the Monetary Fund International (IMF) for a debt of about 45,000 million dollars.
The Global bonds of the swap – in dollars with foreign law – reached their minimum values on Wednesday since they went on the market in September of last year. In some cases, such as GD35 and GD46 are traded below USD 30, a minimum price since its listing in September 2020.
The risk country prepared by the JP Morgan bank marked the 1,822 points at 11:20 a.m., the highest since last year’s sovereign restructuring, although no representative businesses for bonds due to the Wall Street holiday.
The stock index S&P Merval of the Buenos Aires Stock Exchange rises a slight 0.5%, to 83,893 units. Even the Merval accumulates an improvement of 63% in pesos so far this year, compared to an inflation estimated by analysts close to 50% per year.
Traders believe that the weakness in assets is a reflection of the intrigues generated on Wall Street, given the urgency to agree with the IMF and the uncertainty caused by the loss of the majority in the Senate by the ruling party.
“The movement in emerging markets of the last days is a wake-up call to speed up negotiations in post of not suffering greater exchange rate volatilities in the coming months. Regrettably the opportunity to reach a quick agreement has been missed in the midst of the 2020 pandemic, which would surely have allowed greater concessions for Argentina, and suffer less macroeconomic wear and tear on foreign exchange reserves, “said the economist Joaquin Marque, director of UG Valores.
Country risk remains at record levels since the debt restructuring
Jorge Fedio, an analyst at Clave Bursatil, said that “we have run out of trade electoral and the post-STEP drop was repeated, although higher. It could not be different, the political reaction is not consistent with what really happened. The Government in its blindness did not admit defeat and celebrated it like triumph. All a madness that is not understood, does not keep logic, the numbers played against him, they lost millions of voters and on top of that they were left without an automatic majority in the Senate. Instead, the opposition achieved what it set out to do, the parliamentary balance ”.
In addition, the global context influenced the concern over European outbreaks of COVID-19, a potential rate hike from the Federal Reserve and the notorious weakness of the Turkish lira.
“Investors continue watch out for political signals since they are the ones that will mark the viability of reaching a consensus among the main forces from the presentation of the multi-year economic plan ”, he said. Gustavo Ber, an economist at the Ber Study.
Thanksgiving is a holiday in North American markets
“Not only is this challenge complex, in view of the pulls, but also even reaching an agreement with the IMF, the doubts regarding the ability to meet the goals committed in the coming years ”, he added.
In a conference organized by the Central Bank, the Minister of Economy, Martin Guzmansaid it takes refinance the debt with the IMF because it is “the main stumbling block to maintain stability ”, pending the plan that it intends to establish the bases of the agreement with the organization.
In the framework of the Monetary and Banking Conference of the BCRA, the official stated that it seeks to “depend less on indebtedness and issuance monetary policy ”to finance the public deficit, in the face of inflation expected to exceed 50% for this year.