Thursday , July 29 2021

Economists forecast a very strong scenario of volatility

The US currency again occupies a central position in the context of the turbulent electoral environment, with an increase of 4.85%, followed by a yield and closing of 2.69%. The central bank chose to sell $ 60 million through the Treasury in two tranches and to raise Leliq's 8-day rate by 71% through two auctions.

Within this framework, economist Camilo Tiscorna He continued where we are "Context of a lot of instability and speculation", He also explained that a starting point for understanding the day of this Thursday can be found "A combination of political uncertainty with the macroeconomic situation that seems complex. This was worsened by the inflation figure of March ""he added.

Sigaut Gravina: "The growth of the dollar is explained with mistrust and dollarization"

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Lorenzo Siguta Gravina.

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"The more complex macroeconomics is in the short term, the more complex the chances of (Mauricio) Makri political, which further strengthens Christina (by Kirchner), and generates more fear ", deepened Director of C & T Economic AdvisorsThis is a "vicious circle," in which "financial investors react, want to sell their positions in Argentina and what is happening," he said.

For the chief economist of Ecolatina Lorenzo Siguta Gravina what happened was "Significant disarmament of large funds in Argentina" that "It was first seen during the Holy Week when, despite the absence of local markets, the fall of the ADR fell and the risk in the country increased. This was an overview of what will happen ",

Wednesday was the first clear sign of withdrawal and began to notice the exchange rate. The financial stress sooner or later led to exchange rate stress and that happened, "he added. Fortunately, the day ended more calm, with a very high level of risk for the country, but falling as the dollar slowed down, and the BACR responded with interest rates. Although it was very negative, it could have been worse, he said. Siguta Gravina,

Camille Tiscorna

Camille Tiscorna

Camille Tiscorna

At the beginning of the day bonds in dollars, they registered a collapse of up to 10%. However, with the elapse of the hours and the touch of one floor in the price, the demand reappeared and ended with an increase of 2.5%. Tiscornia He explained that this could happen "Some investors have realized that early-day reactions have been exaggerated and have led to corrections."

In this sense, he spent some time explaining the situation of emerging markets in the current global context. – What is happening? worldwide there is instability in terms of expectations, In December Fed He said that in order to prevent inflation, they have to raise the interest rate. In January, they said they would no longer raise the interest rate because there was an expectation that the world economy would slow down and hit the United States. Since then, we have a panorama of the world that is in a process of lower growth. However, Over the past few weeks, data has emerged that is not that bad, which could lead to rising interest rates and lead to capital outflows from emerging markets, which would complicate the country. Anyway, the prospect is that prices remain the same as they are. The problem is that in the short term, these movements complicate Argentina, "Tiscorna concluded.

In less than 60 days, the campaign will enter an ascending spiral with confirmation of the lists for the presidential contest. In this sense, both economists have pointed out that they are far from falling, the state of currency volatility for the next few months will be very strong.

"Volatility will continue," Tiscorna said. "I do not think this is easy to clear. What can clear instability. For macroeconomics to deliver good results, for example in terms of inflation, but it does not seem likely. From a political point of view, it must happen that Christina (from Kirchner) does not appear, but we will not know until 22 June, so we will continue to have very strong volatility, "he added.

"The situation will remain very unstable: it is a government that has very low authority and in a very unstable scenario like the present, these mini-tests like this Thursday may reappear, at best the current tension will decrease, but the third quarter is still ahead when dollarisation is higher. This is only the beginning", Finished Sigaut Gravina.

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