Markets: Bonds fall as Argentina’s country risk rises again following US GDP data

New York stock market indicators are trading with a minimal positive trend of 0.2% this Wednesday after it became known that US GDP in the second quarter of 2024 rose a more-than-expected 2.8% annual forecast versus 1.4% in the first quarter, according to the Commerce Department’s first estimate released Thursday.

Analysts had expected stronger growth in North America in the second quarter of the year, albeit at a lower rate (1.9%) in the April-June period, according to consensus released by briefing.com.

United States, which less than a week before the presidential electionmeasures the growth of its economy over a quarter with a 12-month forecast based on conditions at the time of measurement. On a quarterly basis, growth is 0.7% versus 0.4% between the first quarter of this year and the last quarter of last year.

“The Federal Reserve cut rates by 50 basis points in September, surprising economists who had expected a more moderate cut and some who see the pace as too aggressive. While Fed Chairman Jerome Powell has called it a “recalibration” to move closer to a neutral rate, there is uncertainty about where that neutrality lies. If the US economy proves more resilient than expected, rates could become too low and reignite inflation. “The Fed is expected to cut rates by 25 basis points in November and December, but some warn a more measured adjustment is needed,” he said. George Brownsenior economist at Schroders.

With a certain lack of dynamics in foreign markets, ADRs and shares of Argentine companies traded on Wall Street in dollars showed mixed results. They stressed a fall of 2.6% for Ternium and 1.9% for Grupo Galicia and Banco Francés. Edenor added 3.7 percent..

He S&P Merval Buenos Aires Stock Exchange up 0.2% at 13:40, at 1,849,000 points.amid an optimistic investment climate due to positive economic signals from Javier Miley’s Liberal government, while bonds fell selectively on expected short-term gains.

Argentina’s global bonds fell an average of 1.5% on Wall Street, while country risk JP Morgan, which measures the difference in US Treasury rates with its emerging market peers, increased by 35 units for Argentina in 969 points basics. On Tuesday morning, this indicator touched 893 points, the minimum since August 9, 2019 (860 units).

To clear up market doubts, the Treasury announced it was buying dollars to meet January maturities, adding to signs of lower inflation, support from international organizations, broad anti-money laundering compliance and a positive fiscal performance.

“Treasury announces the process of purchasing from the central bank (BCRA) $2.701 million to make a payment in dollars and euros corresponding to the amortization of the capital of the Globales and Bonares bonds due in January 2025,” the Minister of Finance said. Finance stated on the social network “X” Pablo Quirno.

Minister of Economy, Louis Caputoreported that “dollars have already been purchased to pay principal and interest on the January bonds due. Protected coupons. In parallel, the peso amount is reduced by an amount equivalent to the specified purchase. “This gives BCRA the ability to buy more dollars without disrupting its already established broad base target.”

In June, the Ministry of Economy announced the purchase from BCRA of $1.528 million needed to repay the total interest on the Globales and Bonares bonds due in January.

“The government seeks to deepen the strategy of financing the external needs of the recomposition of the economy through capital flows, using the balance of money laundering,” he emphasized. EcoGo in the report.

A year ago, the risk was about 2,600 points, and the maximum level, close to 3,000 units, was noted by the indicator in July 2022, at the height of the economic and political crisis.

“The sharp decline in country risk and the atmosphere of enthusiasm about dollar announcements and repo opportunities are leading to the country being considered as a concrete possibility for the country to return to the international market in 2025 for refinancing. future payments,” the study explains Wise Capital.

The Treasury placed P892.55 million in a domestic tender, thereby failing to extend the maturities of approximately P1.56 trillion.