Argentina: Bonds break negative streak following Central Bank rate cut
In this scenario, the S&P Merval index climbs an unusual 6.8% to 1,023,054.15 units. This Tuesday afternoon, the CPI will be released.
Dollar nominated bonds climb up to 4% this Tuesday, March 12th, and country risk ends a negative streak of 5 consecutive sessions.
Dollar bonds climb up to 4% this Tuesday, March 12th, and the country risk breaks a negative streak of 5 consecutive sessions following the Central Bank’s interest rate adjustment (BCRA) and awaiting the Ministry of Economy’s peso debt swap, led by Luis Caputo.
Locally, the ones climbing the most are the Global 2041 (+3.9%); the Global 2046 (+1.9%), and the Global 2035 (+1.6%). Meanwhile, those decreasing the most are the Bonar 2041 (-0.4%); the Bonar 2030 (-0.3%), and the Global 2038 (-0.2%).
The BCRA reduced its monetary policy rate to 80% per year, from the previous level of 100%, and eliminated minimum rates on time deposits amid an ambitious Treasury debt swap.
In this scenario, the S&P Merval index climbs an unusual 6.8% to 1,023,054.15 units.
This Tuesday afternoon, the Consumer Price Index (CPI) is also released, which, according to President Javier Milei in a media interview, would be close to 15% monthly.
These decisions would increase liquidity in pesos in the market. We expect this liquidity to be channeled towards the acquisition of dollar-denominated instruments, the weakening of the parallel exchange rate, or instruments linked to inflation.
In this context, the blue dollar rises for the second consecutive session to $1,020, its second-highest value of the current month, while financial instruments climb more than $50, as investments begin to migrate to this currency. The MEP dollar, markets used to convert assets into dollars abroad, stands at $1,031.81.
The National Institute of Statistics and Censuses (INDEC) will release the inflation data for February this Tuesday. According to private estimates, it would be below the 20.6% from January but above 15%, which is the maximum number expected by the Government. The government’s expectation is that it will be “closer to 10% than to 20%.”
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