LOCAL TRADING SHOWED A MIXED TONE, in a session marked by an EMAE activity reading that disappointed, failing to show the rebound expected after July's sharp drop. Dollar sovereigns lagged their emerging market peers, with the long end under pressure, although country risk managed to narrow. The peso curve was mixed in USD terms, with dollar-linked and CER-TAMAR duals posting gains while CER, fixed-rate and TAMAR names slipped once adjusted for the CCL move, even as the exchange rate edged slightly higher and the BCRA returned to buying. In equities, banks and telecoms took the spotlight.
DOLLAR BONDS CLOSED WITH AN AVERAGE DECLINE OF 0.2%, bucking the trend in emerging market debt, which rose 0.2%. Globals fell 0.4% and Bonares 0.1%, with a marked difference across tenors: shorter maturities advanced as much as 0.7%, while the long end retreated as much as 1.0%, with the steepest losses in the 2035 and 2041 bonds. Even so, country risk fell 11 bp to close at 661 bp. Bopreales, measured in MEP dollars, slipped 0.1%.
THE PESO CURVE CLOSED MIXED IN USD TERMS, with dollar-linked notes leading with a 0.1% gain, driven by the short end, followed by CER-TAMAR duals, which also added 0.1%. CER-linked paper slipped 0.2%, with somewhat more weakness in the long end, while fixed-rate and TAMAR instruments also fell 0.2%. In the short end, overnight rates held steady, with the 1-day repo (caución) at 20.7% NAR and the repo rate at 20.5% NAR.
THE OFFICIAL EXCHANGE RATE ROSE 0.1%, to close at $1,524.8, bringing its October gain to 0.5%. In the financial segment, the MEP dollar advanced 0.3% to $1,545.5 and the CCL rose 0.3% to $1,632.0, with the implicit spread (canje) at 5.6%. Separately, the BCRA bought USD 46 M on the day, bringing its October total to USD 1,149 M and its year-to-date total to USD 15,729 M. Meanwhile, gross reserves rose USD 24 M to close at USD 50,225 M.
THE MERVAL POSTED SELECTIVE GAINS, led by banks and telecoms. On the local panel, Ternium (+6.0%), Telecom (+5.2%) and Galicia (+3.4%) stood out in USD terms, while TGN (-2.5%), Edenor (-1.3%) and Banco de Valores (-1.3%) led the decliners. On Wall Street, ADRs rose 0.7% on average. Telecom (+4.6%), Galicia (+3.8%) and Globant (+3.7%) led gainers, while Bioceres (-2.7%), Mercado Libre (-1.3%) and Ternium (-1.3%) were among the laggards.
AUGUST'S EMAE ACTIVITY INDEX HAD BEEN EXPECTED TO REBOUND, after July's sharp drop (-2.8% m/m), but activity rose just 0.1% m/m and failed to recover the lost ground. On a y/y basis it fell 1.7%, its second consecutive decline, leaving it at its lowest level since March 2025. The main concern is that the decline is concentrated in the sectors that generate the most employment. Commerce and industry fell sharply again, both down more than 3% y/y, extending several months of declines, while construction posted its second consecutive drop following March's rebound. Primary sectors, which had been propping up the overall level, lost some momentum: agriculture turned negative (-1.0% y/y), and only mining (+11.1% y/y) and energy (+4.3% y/y) remain firm. The good news came from wages, which rose 2.7% m/m against 1.7% inflation, and are already up 3.1% in real terms for the year, boosted by informal-sector pay. If that recovery holds, it could give some relief to consumption and, with it, to commerce and services.
