After closing February in the red, Argentina’s assets they cannot lift their heads this month. This Thursday, stocks and bonds are in sharp declines, which are deepened in the case of debt instruments, due to an atmosphere of heightened risk aversion in global markets. past noon, bonds are down as much as 5% and the country risk once again exceeded the 2,000 point threshold.
Meanwhile, on a day of extreme caution on Wall Street, Argentine shares listed in New York are moving mostly with casualties, led by Grupo Financiero Galicia, which lost more than 3%. This has an impact on the business of the Merval, which since the inception of the wheel has been operating in negative sign.
Although Argentina enters the third month of the year with not encouraging data regarding its macro activity and its financial front, the main driver of these declines is the increase in the 10-year US Treasury rate, which hit 4% on Wednesday, while the short-term, two-year hit 4.9%, a level not seen since the 2008 financial crisis. Both milestones hit credit markets.
PPI analysts explain: “In an international context that is not at all favorable to emerging credit, sovereign bonds replicated the behavior of their counterparts in the first session of March. Although emerging bonds fell overseas, the behavior of the global Argentines has been particularly harsh”.
For Pablo Repetto, of Aurum Valores, there is local factors that further influence prices of Argentine debt instruments: “The reports that emerge in this regard that the IMF would be even more compliant in the program with Argentina, they would affect the performance of the bonds which drop significantly. To this would be added the probable and the persistent official market intervention to control free dollars“, She said.
Meanwhile, Cohen’s Martín Polo said regarding the evolution of Argentine assets in recent weeks: “The recovery they had shown ended in mid-January and they have lateralized since then. The bad local environment has added to the volatility of the global environment and a little bad luck due to the effects of the weather are a heavy backpack for expectations”.
Moving forward, the outlook looks complicated. Polo added, “Added to that a political climate that is heating up and where uncertainty and uncertainty predominate lack of clear signs Looking ahead to 2024. The economy has entered a phase of contraction, with inflation accelerating and with the Central Bank running out of international reserves, while public accounts deteriorate as public spending recovers the momentum lost in the second half of last year year”.
Source: Clarin
