At the start of the week, Argentine bonds recover after several days of decline. With a slight rebound of 0.5% on average, the country risk drops to 639 basis points.
Last Friday, the JP Morgan indicator that measures the surcharge that Argentina would have to face if it went to the markets, was located at 651 basis points. So it was beginning to move away from the 599 points it had touched two weeks agothe lowest level since January of this year.
Last week, Argentine assets were hit by global uncertainty in the marketsdriven by fear of a technological bubble and worrying data on the evolution of the United States economy. Thus, last Friday Argentine bonds fell 1%.
Despite last week’s slip, bonds accumulate an average increase of 3.5% in the month and they are set to close the year with an improvement of around 8%.
This Monday, the Dow Jones index rose 0.3% on Wall Street, the Nasdaq, which includes technology companies, recovered 1.8% and the S&P rose 1%. However, this is not enough for the Argentine ADRs to raise their heads: almost the entire panel of Argentine stocks in New York is in redwith Macro and YPF with losses of 3%.
Unlike bonds, stocks continue to have negative numbers so far in November. This week the market will be attentive to the presentation of bank results, that would show weak numbers impacted by the increase in delinquencies in credit and card payments.
The other focus of attention will be this Wednesday in the tender that the Central will carry out and in the evolution of rates, after some measures announced last Thursday to loosen the “monetary squeeze.”
The public securities received a push after the electoral victory of Javier Milei on October 26after having gone through several months of falls, which led the country’s risk to touch the 1,440 points two months ago.
The support of Donald Trump’s government for the management of Javier Milei, with the intervention of Treasury Secretary Scott Bessent to stop the rise of the dollarimproved the electoral chances and the result of October 26 changed the mood of the market in favor of Argentina.
Along with that came the ratification of Luis Caputo at the head of the Treasury Palace and the chances of a devaluation receded, which led the dollar to the current scenario of exchange calm.
For the Government, lowering the country risk is decisive to be able to go back into debt in international markets. To cross that threshold, it is necessary for the country risk to consolidate below 500 points. Until now, the return to the 600 point area has allowed several Argentine companies to go out and place debt and the City of Buenos Aires did the same last week, which managed to borrow at a rate of 7.8%.
Last week, the president of the Central Bank, Santiago Bausili, maintained that the government’s strategy to pay the 2026 maturities – which reach US$18 billion– will go through a return to the markets instead of via the purchase of dollars.
“If the Treasury regains access to the capital market, the Central Bank will stop providing the reserves to face payments and the remonetization of the economy.” “It will be directly reflected in the accumulation of international reserves.” And he warned: “We should not force the pace of this accumulation, which will be defined by the remonetization process and not the other way around.”
Hoy The Central Bank’s reserves are negative by US$ 11,000 millionpractically the same level that existed at the beginning of Milei’s management. Although the recomposition of reserves is one of the commitments assumed in the agreement with the Monetary Fund, after the appearance of the United States with a swap for US$ 20,000 million, the stabilization of the dollar and the electoral victory, the economic team insists on betting on the route of indebtedness rather than going out to buy dollars en masse, to prevent the exchange rate from rising and this impacting inflation, Milei’s main electoral capital.