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Dangerous contradiction: cheap dollar and country risk over 700 points



The central bank made it clear that the political side of the dollar was beyond economic. Not only did it raise to the bottom line of the waterline, but it bought less than usual, which could improve its closing price. It seems to be more satisfactory with a delayed exchange rate, even incubating the same problem that caused the current crisis.

A delay in switching will prevent him from phasing out the scheme in the future. Because debt does not recover gradually, but for a moment. The proximity of the election can be a fire that illuminates the wick.

Suddenly, country risk increased by 0.72% and the perforated 700-point ceiling. And this is the true indicator of how investors see the economy. Everything else is scenography that surrounds the central player: investor confidence in Argentine debt.

Bonar 2024, which is the benchmark in dollars, lost 0.24%, while the US Treasury price rose and reduced its yield to 2.69%.. There is a big problem here in Argentina because it cannot even use the fact that the United States has refused to raise interest rates.

The to trade (sell dollars to make pesos use high prices) it is yo-yo, where the return on local currency always returns to the dollar. Although the central bank's gains, which have nationalized the system to absorb through liquidity letters, all fixed terms, the dollar will be delayed. But why don't people buy dollar bonds using 10% annual yield? The answer is that most weight holders on fixed terms and Lecap on the start line to exit and buy dollars when the weather changes.

Changes to the rules of the game abroad were badly affected by Vaca Muerta, who was affected by the investment companies that they were subsidized to start working. To increase the collection and reduce the deficit, the government changed the rules of the game again and points to the country's risk.

The high yield and cheap dollar bond dichotomy is the inconsistency of the scheme, because the devalued dollar means a thriving economy and bonds with falling parities that are not interested in investing in this prosperous country. The scheme is not so sustainable that it brings together a team of ten big players and a welcoming goalkeeper.

In the wholesale market, the dollar opened 10 cents below the previous day and The center came out to hold it close by buying just $ 20 million instead of $ 37.58 instead of the usual $ 50 million. The currency reacted but closed 22 cents to $ 37.53 and was 33 cents to reach the bottom of the currency band.

There is another problem in the center that limits it to buying dollars. Every time you buy currencies, you release pesos and Leliq seems to have exhausted your efforts. In fact, it changed the system. Now, before each bid, you will report the amount you plan to place. He wants to control the money base more.

In the third contest he placed $ 160 billion, which not only allowed him to receive $ 5 billion, but also allowed him to cut interest rates. The reduced rate, the highest rate, fell by 0.74 points to 55.19% per annum, and the average rate dropped by 0.76 points to 54.89% per annum.

At banks and at home, the dollar was sold to the public at 6 cents more than $ 38.59. "Blue" lost 50 cents, which he had won the previous day and was $ 38.25.

Reserves increased by $ 39 million to $ 66.406 million, despite the rise of gold and euro abroad to 48 million US dollars. In addition, we need to add 20 million purchases and subtract 82 million payments from international organizations and Brazil.

The Exchange experienced an euphoria in world markets, when it was confirmed that the Federal Reserve confirmed that the interest rate would not increase and spoke of its concerns about the global economy.

With a business of up to 15 days S & P Merval increased 1.49% to $ 592 million with operations.

Banks continued to increase the index. The focus was on Supervielle (+ 4.19%) and French (+ 2.54%). Oil growth by more than 2% affected Petrobras (+ 1.77%) and YPF (+ 1.11%) growth.

Tenaris from the Techint Group increased 2.29 percent. The company was not affected by a reduction in gas subsidies from Vaca Muerta, as TecPetrol is a company that manages a deposit and has no stock market. Only debt securities issued abroad.

Argentine ADR, Wall Street registered stock ownership certificates, almost increased. Banco Supervielle (+ 3.8%) and MercadoLibre (+ 3.1%) came out best.

Thursday ends the month and hedging operations will take place. Peso is a winner and the dollar seems to have been decided by the end of January under the flotation band story that can be repeated in February or at least a month. The second story that has great opportunities to follow is an increased risk for the country. Investors do not want Argentine dollar debt bonds, although demand for securities from developing countries is higher.


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