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The fight between Milei and the governors hits bonds, but stocks resist and the dollar continues to decline

2024-02-26T18:04:13.419Z

Highlights: The fight between Milei and the governors hits bonds, but stocks resist and the dollar continues to decline. The escalation of political tension between the Casa Rosada and the provincial governors negatively affects the prices of dollar bonds. The equity market is more resistant to political news. Although in the local market the Merval index loses 0.1%, on Wall Street the majority of Argentine companies are moving in the green this Monday. Banking sector papers are the most benefited, with increases reaching almost 5% in hard currency.


Argentine assets opened lower this Monday amid an escalation of political tension. The exchange market remains unscathed and parallel dollars fall again.


"The ambition for economic regulation collides with an unstable political situation,

in which the ruling party breaks the bridges of support with the governors and with Congress. This will be a factor of volatility and risk that will accompany us in the coming months, so "We suggest caution in positions," said Martín Polo, Cohen's strategist, who acknowledged that,

despite the developments on this front, the market "believes" Javier Milei.

The escalation of political tension between the Casa Rosada and the provincial governors negatively affects the prices of dollar bonds, although

Argentine stocks abroad seem to show some strength

.

Meanwhile, in the exchange market,

the parallel dollar is falling again

, in a dynamic that seems unrelated to political noise.

Public securities in dollars have been trading in the red

since before the markets opened, marked by the growing tension between the National government and the province of Chubut, and the new chapter of cutting co-participation towards the province of Buenos Aires.

The

bonuses accumulate improvements of up to almost 13%

so far this month.

The equity market is more resistant to political news

.

Although in the local market the Merval index loses 0.1%, on Wall Street the majority of Argentine companies are moving in the green this Monday.

Banking sector papers are the most benefited, with increases reaching almost 5% in hard currency.

"The fiscal surplus in January, accompanied by the exchange market surplus and the absorption of pesos that the BCRA has been doing, fuel the optimism of investors, who reward with a reduction in the exchange rate gap and a notable improvement in sovereign bonds," sumo.

Meanwhile,

in the exchange market the "summer" extends.

Both the MEP dollar and the cash settlement dollar fall again: the so-called "stock market dollar"

gives up another 1.8%

and settles at $1,057;

while the CCL drops 1.2% and reaches $1,100.

"

Several issues influenced the lower pressure on the parallels:

1) the

dismantling of positions in dollars

due to the need for pesos, within the framework of the liquefaction of savings and the recession; 2)

the (sustained) liquidations of exporters

, which in this new scheme, 20% are sent to the CCL); and 3)

the progressive access to the MULC

by importers and the new BOPREAL tenders, reducing the pressure they exerted on the free dollar," they explained in the consulting firm LGC.

On the street, the blue dollar follows the same trend and falls another $25 to reach $1,080.

Since February began, the free quote has lost $115.

S.N.

Source: clarin

All business articles on 2024-02-26

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