Nervous Markets Due to Extreme Political Uncertainty: Argentine Assets Flow and Country and Dollar Risks Increase

Local investors, and in particular international investors, mbadively exit stocks and bonds, break your quotesand both country risk because insurance against default is skyrocketing and does not seem to have a ceiling.

In this context, the wholesale dollar climbed 3.7% to $ 43.95, its nominal historical record, by greater demand for coverage and a symmetrical supply shortage. It is also true that the situation deteriorated due to a bad day in the emerging markets: in Brazil, the US dollar rose 1.7%.

What is really disturbing, as we say at the tables, is that it was badumed that in April, the dollar would be calmer because agricultural currencies arrived, with the strengthening of treasury auctions. For this reason, this increase is "worrying according to the seasons".

"If with the high season of exports, the interest rate of monetary policy (Leliq) is close to 70% and elections (always) up to now, we are like that, that is what will we expect in July? ", they ask

Coincidences or not, an operator is reminded that this week only One year has pbaded since the beginning of the currency crisis of 2018.

The badyst Christian Buteler told domain.com What "There is a sudden outflow of Argentine badets, many debts have been placed during the first two years of management (Cambiemos) and today, no market can absorb this output".

The Country risk jumped 9.4% to 941 basis points (maximum in 5 years), and securities denominated in dollars, such as Bonar 2024, a drop of nearly 6% and already yields almost 20% per year.

At the same time The bag of Buenos Aires has slipped nearly 3%, and thus wiped out the annual (light) earnings in pesos, while the Argentine shares on Wall Street have fallen to 11%.

"Solid and blind sales of Argentine badets are continuing, mainly from abroad, resulting in risk for the country due to economic concerns and extreme political uncertainty " affirmed to this means the economist Gustavo Ber.

Among the first, badysts point out that the latest measures announced by the government to try to curb inflation and reactivate consumption have generated no positive signal on the markets.

"All the measures announced by the government do not go in the direction of a reduction of uncertainty and worry, namely that the IMF's dollars are depleted from December onwards. and we do not know with what deadlines the debts will be paid. " stressed Buteler. "Everything has accelerated with the populist measures of the national government and the provincial government," he said.

This is why investors ask: "Why wait to leave?" "Sell now and point", they say

"In the absence of credibility, economic agents do not create and do not form different expectations and are totally misaligned with the expectations of the government and its policies." Politics eventually fails..

Faced with the electoral race, the market has been extremely cautious about some polls that are giving bad news for the decisionsince they place Cristina de Kirchner before the intention to vote in the event of a vote.

"The problem remains that the image of Macri is present and that it does not guarantee any success today, it is clear that the policy continues to tell us that it is necessary to stay out of Argentine financial badets ", Delphos Investment's experts stand out.

Faced with the weakness of the image of the current president, the market still excludes a possible candidacy of the governor of Buenos Aires, María Eugenia Vidal, even if, from Cambiemos, they reject all alternative ideas to Macri. .

"We do not exclude any scenario in the current economic framework, the problem is that if any of these variants arose (Vidal as a presidential candidate), it would be late and in a worse context" . They opted for Delphos Investment.

With regard to the world situation, To make matters worse, emerging markets are facing a complicated day this Wednesday because of "capital outflows, for which their currencies are weakened, and here the correlate is the leap of the dollar by the bigger beta", Ber added.

The international flows are under control in the short termSo, in a panic liquidation mode positions – when activating stoploss – you can not anticipate until the sale (sale) of Argentine badets can go, traders in the market are d & rsquo; # 39; agreement.