Monday , June 21 2021

Financial week: optimism returned to the markets, but the real economy is still affected

Surely in response to the punishment that Argentine estimates received 2018, when two major variables came out of the government, such as the exchange rate and inflation, The optimistic mood is now among the financial agents.

In Buenos Aires we are talking about re-entry funds from abroad who are taking advantage of the too low prices of government stocks and bonds that are also backed by a weakening dollar – With higher earnings per settlements of exports and a Strengthening weight for still excessive rates approved by the Central Bank, more than 20 percentage points above of expected inflation.

on The US currency is available, in a currency market that shows a large volume of business for that time, between $ 700 and $ 800 million a day, at a time when exports are at the center of attention wheat, a crop that has not been affected by drought.

A. $ 38.19 for retail and $ 37.03 for wholesale, The BACP takes advantage of the fact that the currency operates under the "non-interference" to add reservations, now in a historical recordings nearly $ 66,500 million. Last week they were purchases of $ 200 million $ 390 million January, continue not to repeat from June 2017

With a agreed amount on the wholesale market, around $ 800 million a dayThe dollar falls by 1.8% since the beginning of 2019 and remains 2% below the floor of the "no interference" established by the Central Bank, which increases at a rate of 2% per month. This Monday, the 28th free floating limit for the dollar will be $ 37,787, some 76 cents above the current value.

The other side of buying the currency of the BCRA is the issue of pesos. Although this is registered within the scope of the. T monetary expansion "zero" proposed by the Chair of the Organization, Guido Sandleris, reality is such extraordinary interest rates in pesos are not loosening: In 56.598% per year after 16 consecutive slices, while stocks of liquidity accounts (LELIQ), the exclusive bank instrument that marks the path of monetary policy already exceeds 800,000 million pesos.

It is for shares January earnings in January, after 2018, in which stocks of Argentina they lost half of their value in dollars, while holding it nominally in pesos for a year in which their inflation "eaten" 47.6%,

Though it blamed marginal profit during the week, the leader panel S & P Merval by ByMA (Bags and Argentine Markets) remains close to 35,000 points, a nominal historical record, while in dollars there is an extraordinary recovery: today 940 points, accumulates an increase of 32% in hard currency in the last month, if 712 dots from the living room on December 26, 2018 are taken as a starting point.

This jump in dollar prices is also evident in Movement of ADRthe certificates by which the shares of Argentine companies are traded on the New York stock exchanges.

After the fall of 2018, exaggerated losses in some cases, No wonder that the reimbursement of prices at a "bargain" price in January. This is just the beginning of 2019, which will be marked by volatility who will print election calendar,

on public debt securities accompany the overall improvement in a market with a calm dollar, high interest rates and rally shares. This is a reference because today the Argentine state is far from being able to place titles on the international capital market due High risk for the country, and there is protection of the monetary fund International (IMF) by 2020

Having led to 15% in dollars on the secondary market, public securities they shrank tightly spreads, now yield between 10 and 11 percent for the most traded issues abroad.

on Argentina's country's risk consolidates the bearish road, although it is still among the highest in the developing world. This JP Morgan indicator measures the interest rate differential between US government bonds and other sovereign issues, and for Argentina about 660 basis points, after 2018 more than 800 numbers.

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