the recommendation of the United States which surprised everyone

The Citi report is titled “LatAm Credit and Economy Strategy” and it opened an unexpected door for troubled Argentine bonds.

Citi’s suggestion to its customers is that they begin to take into account Argentinian bonds for their long-term portfolios and the recommendation is based on four economic points and one clearly political one, in addition to the fact that their yield oscillates at 17/18% per annum.

Citi says Argentinian securities (those suggested are in dollars, Silver 2029 and Silver 2030) They are presented as an opportunity to complete part of the portfolios for four reasons.

Among them, it emerges that the “framework” situation tended to stabilize in relation to the conditions generated by the rising commodity prices on the world market and because the government, with the foreign exchange stocks, succeeded in stopping the onslaught of the dollar.

He points out that the Central Bank is buy dollars by exports and that this, in turn, was decisive for stabilize the exchange rate gap between the official dollar and the free dollar.

The political point that increases the potential of Argentine bonds, according to Citi, is that They see the possibility that Kirchnerism loses the end-of-year elections on the rise.

Hence it is that the suggestion of the North American bank makes its recommendation temporary and for small portions of investment portfolios.

The dialogues of senior officials with those of the IMF always end with a declaration of “constructive meeting” in search of “durability” of a program proposal to refinance the debt that Washington is still waiting for, but has not arrived in over a year.

With the pandemic worsening and traffic restrictions towards the end of May, the concern of officials in the economic zone, which they don’t have a common look, agrees that the inflation spillover it still has neither a diagnosis nor a unified form of action.

The ban on meat exports, supposedly for 30 days, to fight against rising prices in the domestic market has again sowed doubts over the actions of a government which had already in December banned the export of corn , but the measure it only lasted a week.

Will they have launched the ban on starting to negotiate and proposing an agreed plan to export and supply in the domestic market?

There are analysts on the ground who assure that this will be the case but, in the middle, once again the cost of the abrupt rule change would be paid the game, already typical of Kirchner governments which feed mistrust with unpredictability.

The ban on the export of meat also comes in the context of the central bank buying dollars because grain and oil exporters they continue to liquidate the currencies to take advantage of good international prices.

In a context characterized by the Maradonian premise of “portfolio kills the gallant”, the government is preparing to extensively use dollars from the field’s exports to delay the exchange rate in the attempt to reduce inflation and also, for example, to pay more for imported gas as long as the rate is only increased by 9% after two years of freezing.

The delay of the dollar and public rates adds two “anchors” to the anti-inflationary strategy of recent months: wages and pensions.

According to the data officers, salaries and pensions increase by 30% and 28.5% from the year in March against inflation of 42%.

Career they have been losing it for a long time and the result is the official assumption that, in this election year, wages should beat inflation to stimulate consumption.

The cost of living has increased by 4% per month since October, or 60% annualized.

In the first four months of the year, inflation was 17.6% and aims to reach 29% of the annual guideline set by the government in the first six months.

May, according to the EcoGo survey, the consulting firm Marina Dal Poggetto, showed an increase of 4.2% in the second week compared to the same period in April.

These figures go little room for optimism on domestic consumption, even if from a financial point of view, and in the vision of a large American bank, light gaps can open.