Argentine bonds and stocks fall on Wall Street amid tension between Trump and the Fed

Argentine bonds started on Monday with slight setbacksbut the shares of national companies listed in New York registered falls well above 1%among them in Mercado Libre, YPF, Loma Negra, Banco Galicia and Banco Supervielle. Bioceres had a major collapse, after learning last week that it entered into a call for creditors.

At the start of global financial activity, the markets showed a negative reaction to the escalation between the head of the White House and the head of the Federal Reserve. The Nasdaq, the Dow Jones and the S&P 500 fell 0.8%, 0.7% and 0.6%. For its part, the dollar depreciates against the rest of the currencies (DXY -0.4%) and the yield of the 10Y increases (+0.3%), compiled by Portfolio Personal Inversiones (PPI).

Jerome Powell claimed to have received a subpoena from the Department of Justice for possible criminal charges for the building renovation of the Fed headquarters. Powell published a video on Sunday night in which he denounced “threats and constant pressure from the administration”, referring to Trump.

The subpoena arises from Powell’s testimony before the Senate about the $2.5 billion budget for the renovation of the buildings. The government questions the veracity of the data provided.

The underlying issue, however, is the monetary policy of the Federal Reserve. Trump constantly pressured the US central bank to lower the interest rate during his term, a measure that would have the expected consequence of an acceleration of economic activity.

The market responded to this renewed tension between the US Executive and the Fed by seeking refuge in commodities such as gold and silver. Gold operated with an increase in its value of almost 2.5% and remains at record levelsUS$4,600 per ounce.

In the local market, the dollar for savers started stable on Monday in the $1,490 according to the Banco Nación quote. The wholesale exchange rate, which is taken as a reference to establish the distance with the ceiling of the floating band, was operating at $1,468 at midday.

It is expected this Monday that the BCRA’s plan to purchase reserves will continue. So far this year the Central bought US$ 218 millionwell above 5% of what is traded in the official exchange market on a daily basis, which was the self-imposed objective of the monetary authority.