What is the market expecting this week?

The end of the week was one of the better in financial matters for the government. It succeeded in pushing down the parallel dollar prices, the gap narrowed and the Central Bank (BCRA) was able to afford to buy dollars in a matter of days. However, the reservations cyesterday they were $ 333 million in the last 4 working days, since Friday was a public holiday.

“This week has had a chain of events that deserve to be called the best week since the debt swap. the gap has decreased considerably, the BCRA bought dollars again, bonds accumulated several days of reminders, the infections showed a deceleration and even the preferred candidate of the government to the White House would have triumphed ”, summarized Consultatio in its weekly report. The firm recognized, at the same time, that the week began with “a announcement in the right direction: will no longer take transitional advances until the end of the year. “” This announcement was followed by other rumors that would go in a much more moderate line or that even, if confirmed, might suggest a more orthodox manipulation in economic policy ”, concluded Consultatio.

What are you waiting for this week?

During the first week of November, the official dollar advanced 1% at a daily rate slightly higher than that validated by the BCRA. “I know slipped a lot more than what he had done. It seems that the official devaluation is accelerating a bit, ”said Claudio García, from PR Corredores de Cambio.

However, as the consulting firm LCG pointed out, it will be necessary to wait this decision is confirmed increase the official devaluation, as a similar process had taken place in the first week of October it has diluted over the month.

Regarding the financial quotes, operators know that calm is artificial, because it is supported by the sales of bonds by public bodies and a very restrictive stock. However, they believe could still work in the second week of November.

“Calm will remain because they won’t let go of the money with liquidation. The government still has a number of obligations to maintain it. The point is, we are in a market that ends up being fictitious. In reality, they give bonuses that come from future retirees, ”said Leonardo Svirsky, Bull Market Broker.

However, he foresaw: “When they have no more bonds, the price can go up. I think if you stop intervening the market will go up, maybe not to the high, but it would go up.

The dollar Mep closed the week at values ​​similar to solidarity

“La Anses almost every day sell dollar bonds (but in local currency) in the market to reduce the exchange differential. The cost of this strategy is high: selling securities and bonds thatless than 17% in dollars, ”Fernando Marull wrote in his weekly report.

Regarding the amounts, the economist maintained that there was no information but calculated that the the seller is Anses, and what is it about $ 100 million in all.

For his part, García agreed that the government will continue with the same strategy: “Cash with liquidation and Mep, it will continue to regulate with the sale of bonds. Seems he doesn’t want to walk away Range of $ 145 to $ 155. I don’t see it below these values ​​because solidarity is more or less at these levels. ”

Precisely, bring the Mep dollar to the solidarity level, which closed the week at around $ 139It was one of the objectives of the BCRA when he imposed super stocks, in mid-September.

Finally, the blue dollar closed Friday at $ 157 and was down $ 12 in the week ending. It has already fallen $ 38 from its peak of $ 195. In this regard, García explained: “The parallel is clearly moving in supply and demand, I believe that when the first days of the month end, the need for weight is over, the parallel goes up“.

In a cave, meanwhile, they told iProfessional the feeling is that this loss will be short-lived. “It’s gaining momentum and going back up. It’s estimated to be over $ 200 before the end of the year.”they confessed.

The reasons for the calm

Since $ 181.06 pic reached Oct. 22 through Friday’s close at $ 146.99, the counted with liquidation fell almost 19%. the dollar Mep, For its part, fell 13% from its high of $ 163.09 at Friday’s close at $ 141.58.

Marull acknowledged that “the change in strategy in recent weeks has been effective” in reducing liquidity with liquidation, but noted that “had high costs”. Either way, he said the battle is not won like “To claim victory in the short term, you have to overcome the strong peso issue that will take place in December, which will hit fully in January and February, and, fundamentally, that the BCRA is able to structurally reverse the decline in reserves.”

In the market, they believe blue could gain ground

In Quantum finanzas stressed that the reduction of the gap was explained by various official actions, among which they mentioned:

• The indirect intervention on the dollar financial market through the sale of government securities.
• The future market share in dollars, mainly in ROFEX, with short positions.
• The placement of adjustable government securities, especially at the official exchange rate.
• The reversal of certain operating restrictions, such as elimination of parking in the sale of assets with settlement in pesos and the authorization to participate by non-residents in the market.
• The biggest control of operations sale of financial assets.

To this they added other signs that “contributed to cool, less temporarily, devaluation expectations and allowed the interventions to succeed. “In this sense, Quantum has listed the intentions rapid negotiations with the IMF, the idea of reduce the budget deficit in a higher percentage than that foreseen in the 2021 budget and limit on transitional advances.

Pimco bonus, key test

This Monday, after many postponements, the Treasury will finally bring the bonds in dollars until 2030 and 2035 which can be subscribed with securities in pesos.

It is an investment that seeks provide an outlet for foreign funds who entered the local debt market and were trapped by reprofiling. Among them, large investment firms such as Pimco and Templeton.

Guzmán points to stabilization plan for the next 60 to 90 days

The operation, initially announced in June, I know postponed several times and finally you will have your first test. The data will pass through the implicit exchange rate resulting from the tender.

“The Treasury auctioned (via price) almost u $ 750 million in Bonares 2030 and 2035, i.e. in hard dollar (not dollar bonds). Since bonds are trading at 35% parity, this implies that the government offers a way out‘ for a amount less than 300 million USD“Explained Marull. exchange rate, the economist said that at Friday prices it would be closer to $ 145 than $ 150.

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