Facing the start of a new week, these are the key variables in Argentina’s economy to keep in mind
Inflation was 8.4% in April and increased in last 12 months 108.8%Worst figure in 30 years.
In this context, anyone who left pesos in a bank account, in a safe deposit box or sleeping under a mattress, lost by a landslide due to an unstoppable rise in prices.
economist Christian Butler He analyzed the keys to take note of the week starting on a solid note and the market expectations for the next 5 days.
Dollar
The dollar had a week of variation in line with the development of the economy’s prices, but clearly from higher price levels, the expert explained.
“We must remember that it is not sustainable for the dollar to remain stable with an inflation of 8% per month, but in the last stage they went one step higher and went from 75%/80% to 85%/100% . ,” He added.
For the week to begin, the BCRA promised more intervention but I anticipate it will be to avoid a sudden jump once the inflation data is known and will not try to moderate prices.
dollar deal
- Bank Nation $238.50 +1.92% weekly
- Blue $474 +1.07% weekly
- MEP $436.17 +1.00% Weekly
- CCL $467.87 +2.44% week
Gap with official dollar
the dollar keeps rising
rates
The new rate hike from BCRA increased 600 basis points to bring it to 97% TNA.
“Nevertheless, it remains negative with respect to last month’s inflation (8.4%) and UVA2 fixed terms remain favorable due to the acceleration shown by prices, Butler warns.
- Traditional Fixed Term 8.08% TEM
- Fixed Term UVA: 8.4% for the current month, 7.5% and 7.4% for the next months as per the latest REM (Survey of Market Expectations)
- US 10-year rate 3.46 +2bps
action
local market: Strong recovery of the local market after the stagnation that was seen in the past weeks.
“So far, stocks have been a very good hedge against inflation and the dollar, they beat both, but it is difficult to sustain against the first signs of a decline in activity, which will be seen as a result of drought in rural areas, delayed income and increase rates,” the economist said.
US market: Another week of smaller declines in line with expectations despite good inflation data.
“The US market is still debating between the possibility of falling into a recession, although the latest data is taking it away, or coming back to the ground again. Bulls and bears are in full battle,” the expert analyzed. .
- Marvel 321,529.57 +8.21% Weekly
- Merval u$s 685.34 on +5.18% weekly
- S&P 500 4,124.08 -0.29% weekly
bond
Dollar Bond: They ended the week better than they started it, it should be noted that the BCRA intervenes in the market with the intention of controlling the financial dollar, giving them some demand.
“The reserves situation remains worrisome and until the country reverses the situation, these bonds will be too much for long-term investors or those looking to take advantage of the typical rebound,” warned Butler.
Bonds in peso: With inflation picking up, it is bonds and bills adjusted for ser that are in high demand.
“Here we see a significant difference between those who are expiring in this government and those expiring next year, with the former offering slightly negative rates for those who are being paid as of next year. Should go, we have an average rate of 14%. Never better explained that the higher the rate, the higher the risk,” concluded the expert.