The bleeding that Argentine bonds have been going through for six weeks has no brakes. With drops of around 1% in this wheel, the risk country opened in 1,618 points and now it drops to 1,586.
The JP Morgan indicator has not exceeded 1600 points since March 11. So far in Javier Milei’s management it had reached 1,100 points 45 days ago, in a sharp decline after having averaged 2,500 points between October and November of last year. So far in June, the country risk has risen 23.3%, although this year it still falls to 15.7%.
Until mid-April, Argentine public securities showed extraordinary numbers, with a 60% recovery in quotes, driven by the fiscal surplus data that Milei achieved by dint of adjustment. Also the fall in inflation from 25.5% in December to 5% expected for May – the official data will be known next Thursday – encouraged the recovery of Argentine assets.
But in recent weeks, the political uncertainty generated by the lack of progress in the Base Law and the fiscal package, Tensions within the cabinet and doubts about the maintenance of the official exchange rate amid a rise in alternative dollars complicated the outlook. Added to this was the lack of definitions regarding what will happen with the Chinese swap, amid reports that the government will have to pay at least part of that debt. US$4.9 billionwhich would lower the level of reserves.
Also the difficulties that the Central Bank has been encountering in obtaining a greater amount of dollars raises alarms, because it reflects that the liquidation of the harvest is taking longer than expected, which feeds back the expectations that at some point there could be an acceleration of the monthly rise of the dollar that Minister Luis Caputo has been maintaining at 2% monthly since January.
Now, bonds have changed trend and they fall 10% so far in June. At the same time, financial dollars resumed their rise after a three-day pause. The MEP advances 0.7% to $1,280 and the cash with liquid moves 0.4%, to $1,302. The blue dollar increases 10 pesos $1,260.
“The local square was dyed red. Both fixed and variable income did not withstand the uncertainty scenario and extended the collapse. The delay in the approval of the Bases Law, the rumors about the swap roll with China and the conflicts at the legislative level would have caused the correction of the Argentine assets that we have seen for a few days,” indicated from Portfolio Personal Inversiones (PPI ).
