Bonds in the freezer: Guzmán returns from the future, positive rates, recharged CER, dollar, UVA and bonus redux

Going back to what matters, the bonds, yesterday, for instance, and despite the fact that the Sustainability Guarantee Fund (FGS) filled its changuito with CER titles to raise the prices, it could not with the middle part of the curve that suffered blows between 3 and 6% on retracements.

It is true that, as mentioned, it seems that the love that had been established between March and April with the CER assets is ending, already in May a lateral breach began to be respected, many pledged later, and now this. For this reason, taking into account that in Guzmán’s debt tenders his display window had incorporated a lot of title adjusted for inflation and that, given the strategy with the IMF, it must ensure the depth of its funding for the next few days, it is understood that the resource one of the economic team was to enter the market to buy, that is, to put a floor on asset valuations.

Now, almost like a mantra, investors ask themselves: Where do the pesos that say goodbye to the CER go? Several responses came out to meet the curious. None philosophical. One, the most sung as Hamlet would say, was that of the financial dollar, which emerged in the midst of the unknown, climbing, rising among the rest of the prices. While food inflation projects another 5% in June, the CCL closed at almost $220 while the MEP closed at $217.50.

During the period, the monetarist sect offers its explanation: the fiscal accounts for May were overweight as a result of more subsidies and social plans, for which the deficit of the Central Administration almost tripled. The numbers are of a growth of 191% in real terms, in the accumulated until May, which, it is assumed, ends in a greater monetary issue in order to quench fiscal thirst. Data from the Congressional Budget Office show that spending (13.1%) rose more than revenue (1.9%). Immersion in the waters of the deficit shows that spending on social programs grew by 22% in real terms and economic subsidies by 29.8% in real terms.


Although much remains to be analyzed, what is concrete is that institutional investors have been disarming portfolios. Add Lacunza-style reshaping and a combo of inflationary expectations that seem not too aligned, a task that is not easy for Economy. It remains to be seen how to roll over and repay, while Pesce must solve the conundrum of how to accumulate reserves when liquidation is so abundant. It seems like a contradiction, but nothing is completely so when the country risk rises 3% and reaches 2,029 points, the highest value since September 2020.

Last but not least, is what can start to come out. Could the pesos that go to the financial dollar change the course? It is probable. think. What should Pesce do in this whole game? Answer, in addition to seeing how to accumulate dollars, Pesce could, be careful, raise the interest rate. Thus, the CER debt, which is set to be the center of attention next week, could start down the path of becoming a positive real rate, which would give it an air of seduction that it seems to be losing. Thus, if today is the tomorrow that someone worried about yesterday, then Guzmán will have to ponder his leisure ratios, telephone Washington, and convince Georgieva of something that Georgieva herself has surely been convinced of for a long time. On the sidelines, something additional could push: the companies’ need for pesos to pay bonuses. In a few more days, that promise will come true. On the other side of the counter, for now, there is no doubt: the UVA fixed term leaves you just below inflation, but it beats the monthly fixed term and the rate.

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