Thursday , July 29 2021

Markets, between the ghost of the shifts and the effect of Isonomía

However, as happened with De La Rúa's bumper at the end of 2000, or even on Alfonsin's epilogue, investors seem to disbelieve in the efficiency of current rulers to get out of the crisis and stop the ears of all kinds. from rumors and beyond. The current situation seems to have some similarities. Neither the IMF's megaborities, neither the improvement in fiscal numbers nor the correction of the current account deficit, seem to have an impact on investors' expectations.

The dynamics with which things are going is already very worrying. Especially because it's coming back. The key to the whole scheme, designed to manage stormy polluters, requires anchoring inflation expectations and slowing inflation. But every jump in the nominal exchange rate almost imposes the daily "re-start" and "shuffle" again. Ie. they are turning into a few boxes back, which confuses decision-makers from economic agents who question the government's loss of the compass.

Yesterday, in addition to solid financial data, there were rumors and were superior to all tastes. From New York, a group of Creole portfolio managers at the Big Apple road show repeated the rumors that politicians close to Kyrgyz and non-Peronist met with Wall Street funds and banks and talked about the next write-off of the debt. They even say that their number has been thrown, about 30%. There were countless speculations on it. No one gave the face.

But the ultimate scapegoat at the local level in all tables of operations is still the latest study by consulting firm Isonomía, which gives Christina the next president. During the rain, the progress of the former president's book came to add to the fears that Christina would finally be a candidate. This was read, gently, by investors. Maybe like another village excuse. But the truth is that such an early study, four months after the PAS and six in the first round, determines the mood of investors to liquidate strong positions and take heavy losses, serves as a pretext to understand why. But everything happens when it comes to justification. There the fear of a new deflant comes as a glove. Although on the market they are already in place, I think that if someone won, they could face some restructuring.

In connection with the above-mentioned study, the official lab of the campaign believed that Makri would improve, simply because lower than that given by Isonomia is already very worrying. Political reading says the government is running out of its arguments and if it stops inflation, it will be in trouble. "If inflation does not have a floor, Macri is not," warns the expert sociologist. Recent messages can make you recover from falling, but the worry is that it's easy to fall and rise quickly, especially falling, but when you're in a two-thirds disapproval, you keep falling because people feel feeling "pain" with inflation (a month of almost 5% and a quarter of 12%). Inflation and the dollar are the thermometers seen by Argentinians who think they are lagging behind every day.

As you can see, according to the latest CACR data, electoral dollarization seems to have advanced for several months, keeping the forecasts not only for the "Carter", but also for the same government and BCRA. Yesterday at the level of currency currencies the data on the volume of local demand was disturbed despite the money tournament, followed by the dollar of the treasury and those of the agricultural exporters. This has forced BCRA to act on the future dollar market to stabilize the spot or location. In turn, "carry trade" gamblers admit that the scenario is complicated, is no longer suitable for cardiac, so they reduce exposure. And while the government has several instruments to stabilize the dollar (it is too early to think that the IMF will give up and will allow the CRAF to intervene freely in cash), there is no debt market. That's why economist Norberto Sosa from IEB believes that the country's risk, unfortunately, may continue to rise and the slope of the curve may continue to increase. Yesterday, along with the rumors of a new debt cut, operators seemed to trade yesterday, given that 30% distributed between WhatsApp and letters. Of course, no one can ignore that most of the holders of Argentine bonds and shares, not to mention the pesos, have lost a lot of money last year, and so much so far in 2019. That's why the big hands on the market are asking where it is the bottom of all this. A North American bank operator responded that Argentine bonds could continue to adjust until they reached parity close to 70%, according to rumors of a 30% discount. But everything remains to be seen.

Apparently then there are ingredients from the past as opposition people who whispered to the investors that the government is over, as they say that the then deputy Domingo Kavallo had done with Raul Alfonson and an administration that seems unable to create trust and to the crisis of trust is reversed. The latest measures are proof of this. No one believes in them or in their results.

If Macri's chances depend to a large extent on the fall in inflation and have to coexist with a dollar floating through the broad stripes of the area without intervention, the picture does not look easy. With the latest dollar jumps, everything goes back. "Entering a vicious circle where the dollar rises, prices are rising, people are scared and buying dollars, and everything starts again as something that is half-irresistible," is an example of the current scenario, the legendary manager of international banks. No one dares to talk about "playing above", but admits that the problem is difficult.

Yesterday, Argentina suffered from characteristic factors such as Isonomy and other Creole spices and external factors when it was related to the emerging train. Of course, Argentina's weakness makes her suffer more than others. But in the midst of the jugglers and debt-holders, it suffers first-hand the official mistakes, the selfish opponents and the greed of speculators.

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