A measurement from a University was enough to achieve what surveys could not: change the mood of investors. All the surveys measured the result of the elections, but the Torcuato Di Tella University published the result of the Consumer Confidence indicator, which marked a rebound of 6.3% in October after having fallen in August and September. The indicator is taken as a preview of the Confidence in the Government index that will arrive at the wrong time because it will be published on Monday, one day after the elections.
But Consumer Confidence and Government always go together. For this reason, investors woke up and what seemed like hedging turned into exaggerated dollarization because the most credible indicator was telling them that there is a possibility of a good election by the Government.
The index outweighed the help from the United States or perhaps it was a consequence of that help. The “Bessent effect” is pondered in silence because for a notable number of people who support financial aid from the United States it seems embarrassing to admit it in public because it is still associated with words like “colonialism”, “imperialism” or “surrender of sovereignty”. This phenomenon was seen during the COVID epidemic where the rumor was that the necessary North American vaccines were not accepted because they requested delivery of the glaciers.
In this way, the financial market woke up and investors got rid of dollars and poured into bonds and stocks. The fall of the MEP was no less than $60 (+3.8%) to $1,533.50, while the cash with settlement (CCL) collapsed $61 (-3.8%) to $1,551.33. The “blue” followed the trend and fell $25 (1.7%) to $1,525.
In the Free Exchange Market (MLC), the absence of exporters was felt and $677 million were traded, forcing the United States Treasury to intervene at noon and 1:30 p.m., with the strongest position of the day that was successful because it later made minimal appearances that gradually decreased until the closure due to the deterrent effect. It is estimated that with around USD 150 million, the wholesale dollar closed $10 down at $1,479. The day before it had needed USD 400 million.
According to the F2 consulting firm directed by Andrés Reschini, “the volume traded in futures grew again and prices adjusted with setbacks along the entire curve, the same thing that was evident in bond trading. dollar linked. There was rotation from October to November and the first position was sold at the same value as the cash price, but for 8 days and going through the elections.”
F2 added about the intervention in the futures market that “the Central Bank reported its position in derivatives at the end of September and it was -6,844 million when today it should be around -7,000 million, but after the Treasury has issued USD 4,300 million in bonds dollar linked in less than a month and the BCRA has received USD 7,300 million in these bonds through an exchange to increase its firepower, in addition to the advance of USD 7,000 million from exporters and the interventions of the Treasury, BCRA and the North American Treasury. But as we have been noticing a few weeks ago, the futures market seems to have run out of fuel and is not encouraged to validate higher values, in addition to the stabilization of rates in pesos.
It is worth remembering that the Central Bank exchanged bonds dollar linked that have maturities at the end of the month when USD 3,232 million mature. To obtain these imminently maturing bonds, it delivered similar securities for USD 1.3 billion that mature at the end of November; USD 1,053 million maturing in December and USD 873 million maturing in January.
Despite all this, sovereign bonds rebounded and rose up to 2%, lowering the country risk by 44 units (-3.9%) to 1,082 basis points.
The shares had a good run. The S&P Merval of the leading stocks increased 1.8% in pesos and 5.5% in dollars. The most favored papers were Banco Supervielle (+9.2%), Metrogas (+4.9%) and YPF (+4.5%).
Oil had a strong rise in the world that took it above USD 60 per barrel.
In the ADRs – certificates of ownership of Argentine shares that are listed on the New York Stock Exchanges at the price of the CCL – the risk taking of local investors was reflected with almost the entire panel in green. The winners were Supervielle with 13.7%; YPF with 8.7% and Central Puerto with 8%.
For today, another intense round is expected with less caution from investors who are over-covered. It will be the last round and it will be more like a bet because there is no possible reasoning without the data on the results of Sunday’s elections.
