Argentina Country Risk Hits Lowest Level Since 2018
On Wall Street, Argentine stocks posted gains of up to 12.8%, led by Telecom. The podium was rounded by Mercado Libre (+4.7%) and Globant.
Quick overview
- Argentine assets gained investor interest after Donald Trump's conciliatory remarks on Greenland.
- The S&P Merval index rose significantly, recovering losses from the previous week, while sovereign bonds advanced and country risk fell to its lowest since mid-2018.
- Telecom's stock surged following a strategic agreement with Banco Macro, marking a convergence between traditional banking and fintech.
- President Javier Milei emphasized the importance of currency bands and ongoing trade discussions with the U.S. and China.
Argentine assets drew renewed investor interest in the previous session after Donald Trump struck a more conciliatory tone in his push to annex Greenland.
The S&P Merval extended its strong performance and is on track to recover much of last week’s losses, while hard-currency sovereign bonds also advanced and the country risk premium fell to its lowest level since mid-2018. The rally was supported by positive momentum in global markets following Trump’s abrupt shift in stance on Greenland, which helped ease investor anxiety.
On Wall Street, Argentine stocks posted gains of up to 12.8%, led by Telecom. The podium was rounded out by Mercado Libre (+4.7%) and Globant (+3.3%).
Telecom’s surge followed the announcement of a strategic agreement with Banco Macro, under which the bank acquired a 50% stake in Personal Pay, the digital wallet within Telecom’s Personal ecosystem. The deal marks another step in the convergence between traditional banking and fintech.
The benchmark BYMA index rose 0.6% in peso terms to 3,066,434.82 points, while climbing 0.9% in dollar terms to 2,042 points—its highest level of the year.
Bonds and country risk
In fixed income, the strongest gains were seen among Global bonds, with the GD38 leading (+1%), followed by the GD41 (+1%) and the GD35 (+0.9%). Bonares also advanced by up to 0.7%, driven by the AL41 and the AL30, which rose 0.7%.
As a result, Argentina’s country risk fell 2.85% to 546 basis points, its lowest level since June 22, 2018 (535 points).
Milei on currency bands, China, and the U.S.
Earlier today, President Javier Milei gave an interview to Bloomberg. On currency bands, he defended them as a mechanism to contain volatility and limit price swings, adding that they will only be lifted once excess liquidity has been fully absorbed and domestic inflation converges toward international levels.
Regarding external debt issuance, Milei reiterated that the government does not expect to return to international markets except to roll over principal, in line with recent remarks by Economy Minister Luis Caputo. However, given upcoming principal maturities this year, some refinancing may be required.
On relations with China, Milei said the Asian giant remains an important trading partner and that maintaining the relationship is consistent with the government’s goal of further opening the Argentine economy. Finally, regarding a potential trade agreement with the United States, he said talks are ongoing and that positive news should be announced soon.
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