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Dangerous contradiction: cheap dollar risk and country risk above 700 points



The central bank has clearly stated that the dollar has a political aspect that exceeds economic valueIt not only did not bring it to the bottom of the waterline but bought a lower amount than usual, which could increase the closing price. It appears to be more comfortable with the delayed exchange rate, although it is incubating the same problem that has led to the current crisis.

The exchangeable delay prevents him from gradually leaving the system in the future. Because arrears are not being renewed gradually but at the moment. Proximity of choice can be fire that ignites the wick.

Suddenly, country risk increased by 0.72% and perforated ceiling 700 points. And this is the real measure of how investors see the economy. Everything else is a scenario that surrounds the central actor: the credibility of investors in Argentine debt bonds.

Bonar 2024, a dollar benchmark, lost 0.24%, while the US Treasury's price rose and declined to 2.69%, Argentina has a big problem here because it can not even take advantage of the United States abandoning interest rates.

The to carry a business (sell dollars to bet pesos using high rates) it's yo-yo when the profits in local currency always return to the dollarWhile the euphoria of profits backed by a central bank that has nationalized the system by absorbing all the deadlines through liquidity letters, the dollar will be lagging behind. But why do not people buy dollar bonds using 10% of the annual rate of return? The answer is one most weight holders in fixed dates and in Lecap are in the starting line to go out and buy dollars at a change in weather,

Changing the rules of the game in Vaca Muert, which hit the investment companies that were subsidized to start working with the deposit, fell badly abroad. In order to increase collection and deficit reduction, the government has again changed the rules of the game, adding points to the country's risk.

Dicotomy between high yield and low dollar bonds is a system mismatch because the devalued dollar means a prosperous economy and parity bonds that it is not interested in investing in this prosperous country. The schema is as unsustainable as a team with ten great players and a goalie.

On the wholesale market the dollar opened 10 cents less than the previous day and The central bank reached "end" at the end of the purchase of only $ 20 million for $ 37.58 instead of the usual 50 million. The currency responded, but closed 22 cents to $ 37.53 and reached 33 cents on the bottom of the currency band.

The central bank has another problem that limits it to buying dollars. Every time you buy currencies, you release pesos, and Leliq seems to be exhausting your aspiration capacities. In fact, it changed the system. Now, before each offer, you will notify the amount you intend to place. He wants more control over the currency base.

He offered $ 160 billion on Wednesday, which not only allowed him to absorb $ 5 billion, but also allowed him to cut the interest rate. The reduced rate, the highest rate, fell by 0.74 points to 55.19% a year and the average rate fell by 0.76 points to 54.89% pa,

In the banks and stock exchanges, the dollar was sold to the public 6 cents more expensive for $ 38.59. "Blue" lost 50 cents, which won the previous day and amounted to 38.25 USD.

Reserve growth declined by 39 million to $ 66,406 million, despite the fact that gold and euro profit rose 48 million USD abroad. In addition, we have to add a purchase of 20 million and deduct 82 million payments to international organizations and Brazil.

The stock market experienced the euphoria of the world markets when it was confirmed that the Federal Reserve confirmed that the interest rate would not grow and talked about its interest in the world economy.

With the trade in the usual 15 days ago, S & P Merval rose by 1.49% in operations for $ 592 million.

Banks continued to increase the index. Supervielle (+ 4.19%) and French (+ 2.54%) were the most significant. Crude oil growth of more than 2% affected Petrobras (+ 1.77%) and YPF (+ 1.11%).

Tenaris, the Techint group, rose 2.29 percent. The company was not affected by the reduction in the gas subsidy received from Vaca Muerta because TecPetrol is a company that holds a deposit and has no securities on the stock exchange. Only bonds issued abroad.

The Argentine ADR, a certificate of ownership of Wall Street shares, had almost a general increase. Banco Supervielle (+ 3.8%) and MercadoLibre (+ 3.1%) went best.

Thursday ends the month and hedging operations will take place. Peso is a broad winner and the dollar seems to be condemned at the end of January under the fleet band, a story that can be repeated in February or at least part of the month. The second story, which has a high chance of watching, lies in the growing risk of the earth. Investors do not want bonds with Argentine debt, despite the demand for emerging markets securities.


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