Optimistic markets: at the beginning of the year, land risk fell 100 points, to 729 – 01/04/2019


The first financial week of the year had a Sensitive climate change. What was a new land-based risk in December, in December 829 points, Now seems to be reversed. Yesterday, land risk fell to 729 points, Reflecting the renewed interest of investors for Argentine bonds, newspapers that are true these days 30% cheaper than a year ago.

The rise in prices was calculated in the external debt bonds, which rose more than 4% in the week and in the equities. The merchant is registered for the first week of the year, up 6.2%.

The reference to what happened between Wednesday and yesterday came from More of a fundamental phenomenon than local. The main thing: the financial world is convinced that the United States Federal Reserve Perhaps it will not return interest rates to monetary policy again. It's a key fact: just a few months ago the market debated whether the Fed would be forced to raise three or four times during 2019. Now, bets go from zero to one time.

This result Critical for emerging markets. During 2018, the fear of a monetary tightening of the Fed led to a strong outflow of funds from emerging markets.

This weakened the financial assets of these countries, Argentina was stopped badly and the local economy suffered from double Nelson or quadruple.: Outflow of capital, collapse of the prices of bonds and stocks, devaluation of the peso and triggered country risk. This indicator began in the area in 2018 350 points And ended, as stated, in 829 points. This is in the severe financial situation. It also triggered inflation to levels well above what was expected at the beginning of the year.

In the United States, the rate of 10-year bonds, which is the normal financial world. In two months dropped from 3.25% to 2.55%. It was, in a way, a sign of cash repayment in emerging market assets. Yesterday, it rebounded to 2.66% due to good work indicators.

The consultant José Seaba Serrate Expand the explanations with some technical considerations: "Land end-of-year triggering risk is somewhat exaggerated and amplified by the secondary market of Argentine bonds." This was a determining factor in the last days of the year, when the banks that had an instant loan with the 1,350 million government loan came to buy coverage, since they ran the Bonar 2024 bonds. Increase the price of such coverage, which is a substitute for measuring land risk.

For Seaba Serrat, the Federal Reserve does (or rather, what it does not do) is key. "We have seen a much softer speech by Jerome Paual (head of the Fed) where he starts to show more flexibility and admits the interest rate. Is well close to the point of indifferenceThat is to say, the point that the level of the course does not help either to cool down or to raise the economy of the country "and in the opinion of the consultant., The trade war between China and the United States, The other risk factor for the emerging ones, tends to cool down. "It seems that trump already knew he had no limit to raising tariffs without being used by Wall Street".

As you can see, It is more important than what happened in the local factor. In the domestic market they celebrate that the central bank meets the monetary goals and observe quietly that the exchange rate is "repetitive" for the floor of the exchange volume.

Electoral polls, for now, are not moving the amateur. That does not stop good news for the government.

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