The dollar bonds Argentines cut the downward trend and operated with widespread increases of up to 1.3% this Mondayso the country risk falls sharply and pierces 530 basis points. The rebound comes despite the failure of weekend negotiations between the United States and Iran, which left the conflict in the Middle East unresolved.
The movement is surprising because the global context is complicated. Oil prices soar after Washington decided to impose a total blockade on Iranian shipping.
Bonds rise and country risk falls sharply
The dollar rises internationally. The main Wall Street indices moved into positive territory during the dayalthough the mood is one of caution.
The local fixed income curve showed pronounced advances. He Bonar 2041 led with a rise of 1.4%followed by Global 2041 which climbs 1.3%. Global 2038 completes the podium with an increase of 1.2%.
In that context, country risk cuts 25 units and drops to 528 basis points according to JP Morgan measurementa sign that investors see less danger in Argentine debt.
Argentine stocks also rise
He S&P Merval gave up 0.2% to 2,991,781.46 units, while measured in dollars it rose 0.2% to 2,039.26 points.
In the leading panel, Transener shares led the gains with a advance of 4.4%. They were followed by Ternium with 2.5% and Transportadora de Gas del Sur with 1.8%.
On Wall Street, Argentine papers operate with general increases. Globant rises 7.8%, Mercado Libre 3.3% and Ternium 3%. The banks also operated in green: Grupo Financiero Galicia rose 1.5%, as did Macro Bank.
Wall Street avoids panic but volatility lurks
Two of Wall Street’s main indices rose this Monday despite the fact that weekend negotiations failed to reach an agreement. Failure puts the stock’s nascent recovery at risk.
It also opens the door to a new episode of volatility in global markets. The CBOE Volatility Index (VIX), known as the “fear gauge”, rises to 20.61 points.
Expectations of relief from the corporate front were dashed. Goldman Sachs shares fell 4.1% due to weakness in its fixed income, currencies and commodities division.
The financial sector lost 0.6% on the day. The Dow Jones fell 0.6%, while the S&P 500 rose 0.3% and the Nasdaq rose 0.3%.
Oil is approaching US$100 again
The US measure aims to exert maximum pressure on Tehran. The blockade leaves in the air the fragile ceasefire that had been reached a week ago.
It also puts an end, without a clear horizon, to the strangulation of energy exports from the Middle East. Despite everything, there is still hope in the negotiating rooms for a diplomatic resolution.
Brent crude futures rise more than 2% up to US$99 a barrel. This represents a cumulative increase of close to 40% since the war closed navigation through the Strait of Hormuz.
“The market largely returned to pre-ceasefire conditions, except that now the US will also block the remaining flows – of up to 2 million barrels – linked to Iran through the Strait of Hormuz,” explained Saul Kavonic, analyst at MST Marquee.
US Treasuries and bonds across Asia are trading lower. Japan’s 10-year benchmark yield hit a 29-year high of 2.49%although the movements were relatively modest.
Most assets were at roughly the level before last week’s ceasefire. Volatility, for now, is contained.
What is at stake for Luis Caputo on his trip to the IMF
On the local front, this week Economy Minister Luis Caputo will travel to Washington. The reason: the Spring Meetings of the International Monetary Fund.
The second review of the program with the IMF, originally scheduled for early January, remains postponed. Caputo is expected to hold informal talks with the agency’s staff and managing director Kristalina Georgieva.
The recent purchases of dollars by the Central Bank should strengthen Argentina’s position in the second review, although a waiver will be necessary for not having met the reserve accumulation goal. If approved, they would be disbursed US$1,000 million to the country.
“Today it is a secondary concern given the rapid increase in reserves observed since then,” they expressed from Max Capital in reference to the failure to meet goals.
