Thursday , July 29 2021

The central raised the interest rate to 72%, and Anses bought bonds to mitigate the new market mileage

Uncertainty in the markets rose again on Thursday. After the black Wednesday, at the opening of the day the risk went to break the barrier by a thousand points and the dollar jumped more than two pesos in the first hour of operations to quote $ 47.50 in the official banks.

Since the opening of markets in Argentina, the day has already been painstakingly painted by the appreciation of the dollar in the world. Even before he started working locally, the risk had already broken the barrier by a thousand points and reached 1011. The closing on Wednesday was 950 points after touching 963.

This uncertainty was quickly transferred to the dollar, which 25 minutes after the start of operations already jumped almost two pence in Banco Nacin: from $ 44.90 on Wednesday to $ 46.80. He then reached $ 47.50 – the historic maximum of the US currency, then calmed down for $ 46. In settlements like La Plata, it reached $ 48. In the wholesale segment, the peak was $ 46.55, ending at $ 44.90.

Given this new record, the Central Bank came out to play hard and, in addition to its $ 60 million classic day-to-day auction, confirms an interest rate increase of 72.25%, up to a maximum of 73%, returning to the top October. 2018. It is a very dangerous measure because, although it has reduced the ticket more than a pocket, it still remains well above the previous wheel and will undoubtedly have an important influence on the level of economic activity.

The market had versions of a call from Sandleris to the IMF to allow him to sell more than $ 60 million a day in the new deal.

Even on the market there were versions of nearly twice as much as possible in the deal, agreed by phone call by Central President Guido Sandleris with the IMF authorities.

Black Wednesday Markets after Christina's bid and pressure to exit Macri

As an aggravating circumstance, rising risk and triggering of the dollar combined with a rise in CDS, which was around 1300 points with an index of 50% in less than two weeks.

This is a good thermometer for the fear of Argentine insolvency markets, which explains the massive closure of the assets of local assets that, when no buyers are found, reduce their value and present themselves.

For example, Wall Street's Argentine companies' ADRs have fallen back to 13% today, and many of them have lost more than 40% in the year, indicating how cheap they are to the world. In turn, some bonds such as AY24 already give about 20% in dollars.

The dollar is in the center of La Plata.

It was so categorical that each time operators took advantage of closing positions and asset purchases at this lower price, which led to their subsequent rebound, and the stabilization of the risk went to 947 points. There was even talk of mass purchases of the antes.

"The ultimate volatility of Argentine assets is being exploited on Wall Street.The market began with the minimization of the Argentine ADR and the demand for technical support. In these values, orders were fired to close short positions, after which important struggles were made, with the Galicia group jumping from 18 to 20.7 dollars, while AY24 had a 7% rebound, explained Francisco's Uriburu Market analyst.

The ultimate volatility of the day allowed rough maneuvers with links, and the mark was about massive purchases of Anses. These are market maneuvers, known as short sales, which consist in selling an asset to buy back then, cheaper.

However, the failure of the Argentine papers continues to be insignificant and has been deepening since March, when the so-called "capital flight" was revived by 83.7% per month and from $ 964 million to 1.771 million, not so much to buy dollars the accumulation of small savers, and the disarmament of pessos positions of investment funds.

With the floor bonds, large purchase orders went in, allowing the debt to drop to 2.5% like that of the century. In this sense, the market indicated Anses to buy many short-term bonds such as AY24 and AO20 at 14:30, which motivated the reimbursement of contributions, although FGS assured them that they could not make public. Your positions in the portfolio.

The exchange rate progress was parallel to this movement, accumulating an increase of 17% since the beginning of March and almost 10% after the signing of the famous "gentlemen's agreement" on frozen prices, which can hardly be maintained. this trend.

This is getting closer to the $ 51.45 ceiling on Sandleris, which has too many tools to protect it. "When you run $ 150 million a day, you will not be able to stop it, I think last year they sold up to 1500 million on one wheel." The central bank's pledge is now that people will run out of pessos before they run out of dollars, but this is a dangerous game because it relies on deepening the recession, "said analyst Christian Butler.

Another consequence of this new exchange rate is the spiral debt-to-GDP ratio, which is already close to 100% of the product, a level that raises doubts about Argentina's repayment capacity.

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