BANKS WEIGHED ON THE MERVAL, in another session of USD 230 M in BCRA purchases, with the official exchange rate unchanged and financial dollars edging up. Sovereign dollar bonds traded mixed, while the Merval fell in dollar terms, led down by banks. In pesos, the session was negative for Lecaps, CER bonds and dollar-linked bonds. Separately, the fiscal result for June was released.

PESO CURVES TRADED NEUTRAL, with narrow moves. CER debt closed unchanged, adjusted for the day’s CCL move, while Duals were flat and Lecaps and dollar-linked bonds slipped 0.3%. Within the fixed-rate segment there was a slight steepening, with longer Lecaps giving back around 0.4% against a stable short end. On peso rates, the one-day repo (caucion) held steady at 20% NAR in the session following the Treasury auction.

DOLLAR BONDS EDGED LOWER, with the hard-dollar index down 0.1%, tracking a broader decline in emerging-market debt. Globales fell 0.2% and Bonares closed nearly flat, in a mixed session where the GD29 (+0.6%) advanced while the GD38 (-0.6%) lagged. Country risk rose 5 bps to 409 bps. Bopreales edged up 0.1%.

THE OFFICIAL EXCHANGE RATE WAS LITTLE CHANGED, closing at $1,474.77, accumulating a 0.6% decline in July. The MEP rose 0.3% to $1,517.96 and the CCL rose 0.1% to $1,563.88, with the FX spread at 3.0%. Separately, the BCRA bought USD 230 M on the day, accumulating USD 1,406 M in July and USD 12,580 M so far this year. Gross reserves fell USD 62 M, closing at USD 48,531 M.

THE MERVAL FELL 3.3% IN DOLLAR TERMS, closing at USD 2,036, in a broadly lower session. Banks led the declines, followed by utilities and energy. Among local stocks, Banco Macro (-5.3%), Supervielle (-4.9%) and BBVA (-4.6%) led the losses. Among ADRs, the average drop was 2.3%, with Banco Macro (-6.1%), Supervielle (-5.7%) and BBVA (-5.1%) leading the declines; Globant (+2.2%), Bioceres (+1.4%) and MercadoLibre (+0.9%) were the positive exception.

THE NATIONAL PUBLIC SECTOR POSTED A JUNE FINANCIAL DEFICIT OF $1.02 TRILLION, the result of a primary deficit of $696,843 M and net interest payments of $328,049 M. The shortfall reflected lower revenue, as the personal income tax payment was postponed to July, and higher spending on the year-end bonus for retirees and pensioners. Total revenue grew 22.3% y/y and primary spending 37.7% y/y, driven by social benefits (+38.1% y/y). Even so, the first half closed with a primary surplus of around 0.6% of GDP and a financial surplus of 0.1% of GDP.