With the dollar stable, country risk increases while the market focuses its expectation on this afternoon’s debt tender

Argentine bonds in dollars had started stable, but after midday they fell 0.2% on average. This leads to a new rise in country risk, which advances 1.7% on the day and 10% so far in August, to 474 basis points. It is the highest level since June 10.

As for stocks, the Merval lost 0.8% and in New York most Argentine stocks fell, with declines of up to 3% for Mercado Libre and BBVA.

In this round, the market’s attention is focused on what will happen with this afternoon’s tender in which Finance will seek to renew maturities for US$4.5 billion. The other focus of attention is what will happen tomorrow when the inflation rate for July is known, which would have climbed back to the 2% area.

“This Wednesday the market’s gaze will be on the Treasury’s debt tender in pesos, with maturities of just $4.5 trillion, low for recent tenders.. In this framework, fixed rate, CER and dollar linked securities are offered, all with maturities in the current mandate, unlike previous tenders in which higher maturities were planned for the next mandate,” says Juan Manuel Franco, chief economist of Grupo SBS.

“The focus will be not only on the rates, but in the degree of expansion or absorption of pesos that the tender implies, especially after the strong absorption and pressure on rates that the last tender in July produced,” adds Franco.

“On this occasiona roll-over of less than 100% should not be ruled out in search of alleviating the volatility of peso rateswhich is crucial to provide a better context for activity, credit and social humor,” says economist Gustavo Ber.

From the Cohen Group they detail that the menu offered by the Ministry of Finance combines a new LECAP/BONCAP with expiration on November 30 of this year, a CER instrument on 1/29/27, two dollar-linked instruments on 09/30/26 and 10/30/26, and a hard dollar reopening of AO29 (10/31/29).

“With limited maturities and somewhat tighter liquidity, after the decrease in the stock of pesos that the Central Bank absorbs via repo to $1.08 billion compared to an average of $2.5 billion In July, the Treasury should achieve a rollover of more than 100% without major complications. Even so, The supply continues to point to hedging instruments to capture that demand, with fairly short terms within each segment.“, analyzes Cohen.