Finance: IMF visit and deadlines for letters, two major issues for the markets

The arrival of technicians from the credit bureau and a new series of letters maturing in the amount of 2,800 million US dollars are two points that will be targeted by investors; On the outside, attention will continue to be focused on the impact that the trade war between the United States and China could have on the market.

Important financial data for local investors will be known in the coming days. On a daily basis, key dates are added for approximately $ 2800 million
the arrival of the mission of
International Monetary Fund (IMF). Internally, not exceeding the minimums already observed in local badets will be a good point; while outside, it will be necessary to see what happens with the commercial conflicts.

1. Expiry of treasury bills

In the coming week, they will earn about US $ 1,600 million in US dollars and more than US $ 67,000 million in letters (about 88 percent is Lecap and the rest is Lecer), which equals about US $ 1215 million. . The turnover rate should be low (from private investors), at a time when uncertainty remains strong, although some political signals have rebadured the market.

In the case of Letes, if the same scenario of the last investment is maintained, there will be only one renewal by the public sector. If it is estimated that about $ 900 million expired is in private hands, the carryover should be in the range of 43% to 45%. As a benchmark in terms of performance requirements, secondary market rates are used, although the liquidity of some expired instruments is very limited, which does not allow a real operating price. If the renewal is weak in the case of the two letters, the effect of what is "paid" will be different: in those in dollars, it will be a question of reducing the gross reserves, and in the case of the pesos, will be possible to press the type of payment. switch

2. The look put on the fund

We talk a lot about the IMF these days. After all, he is Argentina's largest private creditor. He is currently owed about US $ 44 billion (more than 13% of the total gross debt). The discussion addresses two different visions: one of very short term (weeks) and the other of short term (a few months). In the first case, reference is made to the audit which is coming soon and which will be referred to the second quarter objective, but also to the current situation and the current third quarter.

The relevance is that, to close the financial program this year without major complications (especially if the uncertainty is worsening more and more for the market), it is necessary to proceed to a new disbursement of those provided for in the agreement. , in the middle of the month. then about US $ 5,400 million. In the meantime, the second point – which concerns less the current government than the next – concerns the need to renegotiate the agreement. Basically, the pbadage of the day before a modality called extended facilities. Although this is not expected immediately, it can not last much longer.

3. Investors, with limited opportunities

It is clear that, as the scenario is set today, the transition will be neither easy nor short. High volatility – and even, sometimes even more than what a trader can envision a business – now maintains a high probability. This will surely generate interesting trading opportunities, but these are opportunities that do not identify with any type of investor. As a result, even with current bond and share prices, caution remains. There are no big buying opportunities, but the selling prices are not so great either.

There is a kind of wait-and-see attitude until there are more concrete political definitions. But the reality is that these may not come at the moment. The Merval thus remains at around 500 dollar points and the sovereign bond curve remains inverted due to the likelihood of a restructuring that remains high. In this context, prices are kept a few dollars above those indicated in the days following the WWTP, but do not show a recovery that reads as a change in expectations. The stability and non-failure of these levels, however, are two good points.

4. Expectations on the world stage

Externally, there is a combination of issues that impact the markets. Among them, the situation in Italy, the Brexit, the trade war centered on China and the United States and the signs of a global economic slowdown. The latter brings the return of monetary stimuli. And on these signs, the stock and debt market is virtually halted today.

At the end of August, attention begins to focus on the Federal Reserve (Fed) meeting in mid-September, with a 100% probability of a further reduction in rate. The meeting of the European Central Bank (ECB) which will take place a few days earlier and which is expected to announce a broad program of new stimulus measures, which goes beyond a plan to reduce rates, also raises expectations. The objective in these cases – and in that of other central banks that are further easing their policies since the 2008 crisis – has the same root: to mitigate the observed slowdown in global growth. Hence the importance of economic data to see including a more soft Fed (soft, English) or not.