Lacunza and IMF expect more market volatility

Economists and badysts hope that this week market volatility will persist because of the change of Minister of Finance. They are focusing on how the negotiation of the new Finance Minister, Hernán Lacunza, with the International Monetary Fund (IMF) will progress so that in September, pay out the remaining $ 5.4 billion of the deal.

Diego Martínez Burzaco, chief economist and director of MB Inversiones, said that "the deal will focus on Lacunza's relationship with the IMF and how he can handle a waiver after the announcements made by President (Mauricio) Macri. – divert the fiscal objectives from the agreement ".

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He estimated that he did not believe that this diversion called into question the Fund's last $ 5.4 billion payment in September of this year, "but felt that it" would be at most an IMF warning, "said Martinez Burzaco during a dialogue with the agency. Télam. "These funds are essential for renewing very short-term financing in the Treasury and this is where the market will focus." "And that has an impact on country and dollar risk," concluded Martínez Burzaco.

For its part, Leonardo Svirsky, an badyst at Bull Market Brokers, predicted that "in the markets, there will be a lot of uncertainty from now until October and that it will continue with volatility, The market will be dangerous, "he said.

The director of research for traders, Gustavo Neffa, agreed that "the environment will remain very volatile.I am expecting a negative market reaction to what happened yesterday with the company. 39, ministerial exchange ".

Neffa explained that this bad reaction was due to the fact that "(Nicolás) Dujovne was the link with the IMF and that, of course, all IMF projects to maintain the budget figures suffered a major setback with the latest measures that have a very high budgetary cost ".

"Lacunza has turned out to be a very smart economics minister in the province of Buenos Aires and the market sees him as a very experienced personality, a young friend of the markets.He will have a very difficult role to play for the next two months, "he said. . On the other hand, he enjoyed Sergio Mbada's trip to New York, looking for links with the (Donald) Trump administration. "

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Similarly, an badyst at one of the major local market companies pointed out that "the closest and most immediate challenge to Lacunza as a minister is to see what is the relationship with the IMF". "Lacunza and (Guido) Sandleris, president of the Central Bank, were part of the team that worked with the IMF to make the relationship fluid, but the latest moves deter the government from complying with the fiscal and economic situation. to take additional measures, "he said.

He felt that "the market will be for the moment attentive to the evolution with the IMF.The dollar, the market will depend on the progress of the negotiation". "The only thing that should be accomplished, in the very short term, is that the IMF confirms a technical visit for the last week of August and meets to negotiate technical details and possibly certain conditions for the disbursement of the mid-term. September."

Santiago López Alfaro, partner of Delphos Investment, the investment consultant who predicted a 10-point difference in favor of the Fernández-Fernández formula, said that volatility would continue: "We do not think that a recovery of the markets will start, only for traders, only for specialists. "

"The bonds are still in a bad technical position," he said. As for the dollar, he expected that he would continue to be pursued: "The power station is working well, it raises rates and sells dollars, it must use its dollars only to go into debt and run." .

He said "the most important thing here is that the IMF approves the disbursement on September 15. There is the key to what will happen."

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