Trump punishes China with an increase in tariffs and should increase the dollar in Argentina

All stock indicators have been recorded so far. The president of the United States cut the lights of the party imagined by the operators. Wall Street plans an opening with falls of more than 2%. Before the opening, Europe experienced ups and downs earlier than the North American and Argentine stock markets. For them, Trump's measure does not affect them.

In exchange, Eastern markets opened Sunday evening in the west and Monday morning with landslides. The A50 of China, one of the main indices, lost 6.34%. Chinese shares followed with 3.60% and Hong Kong with 4%. The Nikkei in Japan lost 2.30%. It should be noted that prices fell slightly and then picked up again.

This bad omen can forcefully infect Argentina and Brazil: there will be capital outflows that will sell the bonds of emerging countries to make them back to the dollar. These two countries will be the most affected.

Last week, they had a warning signal. Banks' peso deposits decreased by $ 9,600 million, although they are paid more to savers. The ones who took the money were the big companies. Of course, it is not a race: the money that pbades is transferred to a current account, a savings account or the purchase of dollars within the same bank or to the suppliers who will deposit it. also. The local money is always in the system.

Banks now want to discourage dollar deposits because they give them losses. They can not keep them in their coffers for lack of capacity. 86% of dollar deposits are in savings accounts. Investors do it not to spend on renting safes.

What banks want are deposits in pesos and their rates increase by 4 to 5 points a year. But even if they exceed 50 points, it does not discourage them to switch to the dollar. Last night, the currency strengthened by 0.06% against the world's major currencies and maintained an upward trend.

In March, term deposits increased by 1.5%, showing that no investor has made a complete renewal of their loans and new loans. A datum serves as a reference. February's deposit growth was double that of March, despite higher rates from the previous month.

For March to be compatible with monetary policy, fixed terms should have been multiplied by three. They would thus be in phase with the increase in the interest rate paid by banks which already exceeds 50% per annum. When a fixed term does not increase at the rate of the interest rate, it is that there are withdrawals and people who do not renew their internship. And even if they are nominally higher, they fall in real terms because the currency is worth less than before and does not cover this devaluation with the reinvestment of interest. The fever of deadlines has pbaded.

That is why, in April, the fixed conditions should have increased by nearly $ 60 billion, instead of the $ 15,747 million they recorded. They increased at least a quarter of what they should have done. The largest amount of withdrawals is made by the companies.

The fact that pesos leave places where premium rates reach 15 plus points relative to estimated inflation is a sign of the weakness of the local currency and a stimulus for the dollar because fixed term money does not go to Leliq 's bidding and forces the Central Bank to release pesos. This weakness was more evident when the BCRA, as part of its bid to absorb money in the market, paid 73.77% per annum.

Thus, with deposits growing lower than inflation and rates, a stormy Monday announces.

Another fear raised by the dollar is that Monday, the Ministry of Finance will launch a tender for Letes (national treasury bills) and Lecaps (capitalizable bills).

The Letters do not submit them more to 180 days as before, but to 70 days for the complication of the elections. These securities can only be purchased in dollars and will expire on July 19th. The rate can be about 5% per annum in dollars. Lecaps can be subscribed in pesos or dollars. They expire on June 28 and will pay a monthly rate of 3.50% in pesos.

It is thus reached a week without agreement of the political parties, or without any relief. We will now have to see what the market is doing with bonds after worrying statements by politicians. Do not forget that they also earn $ 1,800 million from a 2024 Bonar Capital and Interest Coupon.

The investor response is the key. But miracles are not expected. When Bonar 2019 expired a few weeks ago, no one bought any other bonds with the requested dollars. This is another argument for why the dollar can rise. Everything seems to indicate that there will be a wheel in which the Central Bank should intervene openly.