Another volatile week with still many uncertainties begins this Monday for Argentina even when some of the latest measures adopted by the administration of President Mauricio Macri helped to calm markets, debilitating apocalyptic forecasts.
Following the implementation of restrictions to the withdrawal of hard currency, the Argentine central bank international reserves so far accumulate losses of US$ 3.151 million, and they stand at US$ 50,949 billion. On the last trading day last week the bank sold US$ 424 million.
Long queues of depositors wanting to withdraw their dollar savings from Buenos Aires banks was seeing during last week, while Central bank authorities insisted that the policy was to defend the value of the Peso, and reserves are precisely for that purpose.
In the local Merval stock market institutional investors took advantage of the plummeting of stocks since August 11 primary election, and ended last Friday with a weekly surge of 12.4%, including 2.7% on the last trading day with a preference for financial and energy stocks..
There are some real cheap bargains and this can be seen in the market, time to risk some limited purchases, pointed out a local broker adding that overseas speculative funds have been sniffing the market.
As to sovereign bonds, they have recovered between 18% and 25% for those nominated in Pesos and some 16% on average for those in dollars.
Nevertheless the sustainability of the recovery will much depend on the political, economic and financial signals, both during this transition period (two round presidential election at the end of October and end of November) as the post 10-D announcements which is when the new government takes office, thus volatility is high and remains.
Likewise another piece of encouraging news came from JP Morgan country risk rating, although tepid drop from an extremely high level, it was down 7.9% last Friday and now stands at 2029 points, when last week it had reached 2.600 points.
And finally the Argentine Peso strengthened against the US dollar, an estimated 6.5% during last week, which means the exchange rate stands at 58 Pesos to the greenback, while the government's Banco Nacion was quoting 53 and 57 Pesos.
Meanwhile in the so called alternative or parallel market which was reborn since the restriction on dollar deposits in banks, actually was up 6.5% reaching 65 Pesos to the US currency.