First reactions to Sergio Massa’s announcements: dollar bonds collapse

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Announcements of new measures to control the exchange rate gap and obtain financing in pesos through the sale of government bonds had a negative impact on the bond marketthan before the official opening dropped by up to 5%.

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The official initiative, released on Tuesday evening, not yet implemented in a decreeso investors try to understand the entity and they react with sales.

On a key day for world markets, when the decision of the Federal Reserve on interest rates in the United States will be known, dollar bonds have set in motion with deep falls. The Global Bond 2046 fell by 5.4%, while the one maturing in 2041 fell by 5.1%.

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A market operator said so clarion that the price drops are due to the doubts generated by the plan of contingency that the government will present this Wednesday.

According to official sources, the idea is that the bodies that make up the National Public Sector, in particular the Anses Sustainability Guarantee Fund, they will have to sell their positions in dollar sovereign bonds (local law) in exchange for treasury bills in pesos up to 70% of the actual value generated. On the other hand, it will also be forced to exchange the holding of Globales (foreign legislation) for securities in pesos.

Falling dollarized bond prices make the country at risk they worsened by 0.5% on market opening and returned to 2,347 points.

“AND a bad operationthat’s not what the economy needs right now and talks about lack of purpose who has the leadership,” commented another local market player, who said that in terms of controlling the exchange rate gap and inflationary pressure, the results of this measure will be “harmless”.

In a report for their clients, Delphos analysts underlined: “The pending (or still unknown) part of this operation that the Ministry of Economy is about to present lies in the obtain a genuine or regulatory claim for the Bonares in order to avoid a collapse of their parities which derails the operation even before the launch”.

“It’s a “hidden” issue of new bonds (even if they are ‘old’) to get new funding for the Treasury. If the buyers of Bonares come from previous sales of peso bonds that the Central Bank ends up buying in the secondary market, then the Central Bank will indirectly finance the Treasury.”

Source: Clarin

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