Sunday , August 14 2022

Today the dollar faces more tests: Treasury bills are renewed and the daily battle with rates continues t



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That the dollar has increased 25 cents to $ 42.08, not a small advance. This is the fifth consecutive increase and the fifth conflict with the rise in rate. What was worrying was that the dollar had risen in Argentina, the day that it lost value against almost every money.

The DXY index, which compares the dollar with the six main currencies in the world, has lost 0.10 per cent. In Chile the peso had not changed, but in Mexico the peso rose 0.13% against the dollar and in Brazil the truth rose 0.9 per cent.

The fall in US currency due to the strong increase in the Treasury Bond 10 years did the performance fall below 2.40% something not seen since the end of 2017. But then, when the Mueller report ended Donald Trump of the accusation of receiving support from Russia in its election campaign, the market responded. Stock exchanges reversed their trend and cut losses, while the bond reduced its price and performance increased to 2.42 per cent.

This data is important, because it can stimulate Wall Street's response, the European stock markets and benefit markets that come to the fore because the US president will be free to try re- This means that it has to close trade agreements with China and take measures that help the economy to grow. If US investors give pessimism the best, the stock markets will grow again and the dollar will strengthen.

The problem is that this reversal of the market can help Argentina which seems to be behind a wall that only penetrates the bad news. The good ones stay outside and do not help to cover the dollar.

For investors in Argentina, an electoral review is more important than a good survey of the world economy. And surveys in recent days make the electoral landscape more confusing. Although we have to rule out these consultations because in these situations, as happened in Neuquén, the voter usually changes the vote at the last minute.

He made the dollar, which began to fall in the wholesale market and came to trade for $ 41.70, strengthened and slowly overcome two Tender Liquidity Letters (Leliq), where the rates were raised. Thus, it ended at $ 42.08 (+ 0.60%).

In banks and exchanges, the dollar rose to 13 cents to the public at $ 42.99. The "blue" had not changed at 42.20 pesos.

In the Leliq tender, $ 183,326 million was raised at an average rate of 66.83% which is 0.18 points higher than those of the Friday wheel. But the data that we can worry is that it has released $ 9.300 million because it did not contain all maturity. This is equivalent to putting more pesos in the hands of those looking for dollars.

There is a fact that it should not be noticed in the Central Bank's report on the foreign exchange market. He says institutional investors in February have bought USD 600 million against USD 1,100 million in February last year. But there is one detail: in February 2018, the dollar increased and demand for foreign exchange was very high. There was no restrictive financial plan or IMF support. In contrast, last month, most of the purchases were made in the last ten days when institutional investors realized that the dollar was earning the fixed period, amidst a silver constraint and with almost rates double to February 2018. And this is the key to why the rates did not be an arbitrator between the peso and the dollar.

The reserves, meanwhile, have pierced the floor of USD 68 billion. They dropped 533 million to USD 67,504 million despite the rise of the euro and other foreign currencies earned 57 million and the 44 million payments to international organizations and to Brazil.

The collapse to a Treasury order to the Central Bank responded to the abolition of REPO surgery. This movement includes the sale of Government bonds to a group of private banks. In the sale, a term is agreed and the price of repurchase of these securities. The difference between the two prices is the rate paid for the operation. In this opportunity, it was decided to cancel one of a number of REPO operations to ICBC bank, for that reason the reserves lost something more than USD 500 million.

The slight fall in Bonar 2024, the Argentina debt reference bond, caused the Treasury's Bond increase in the US, that the risk to a country increased by 0.65% to 770 basis points.. This is the fourth consecutive increase in risk that last 7 March was 723 basic points and a year ago, Argentina's risk was 418 points.

The Stock Exchange was the opposite of the world that had a negative turn in Wall Street, Europe and Asia. Merval S & P rose 1.03% with a good amount of operations of 802 million pesos.

The most important increase was Banco Galicia with 4.24%, and then Central Puerto with 2.45%. The most affected among the few casualties were Transener with 2.51 per cent.

On Wall Street, Argentina ADRs – confirmed from shares – the majority were increasing. Lor better through Corporación America (+ 5.33%), Banco Galicia (+ 3.99%) and Banco Francés (+ 3.33%).

On Tuesday, the dollar will face another key test. We will have to see the result of the auction of Treasury Bills in pesos (which can be capitalized, indexed by CER and in dollars). The behavior of investors with letes published in dollars will be key. The percentage renewal is the data to follow.

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