ARGENTINE ASSETS TRADED CLEARLY OFFERED in the week's first session, shortened by Monday's holiday. Dollar sovereigns decoupled to the downside from EM debt, which only edged lower, with country risk back above 500 bps, while the peso curve traded with a selling bias concentrated in the belly and long end amid liquidity that remains tight. The day's focus was on the Treasury's swap of the LELINK D31G6, aimed at easing the month-end maturity. On the fiscal and price front, July brought a new financial surplus and a further slowdown in wholesale inflation, but neither was enough to support sentiment.
THE TREASURY CARRIED OUT THE SWAP OF THE LELINK D31G6, maturing August 31, offering the LELINK D30S6 and D30O6 in exchange, maturing at the end of September and October. Of 255 bids received, participation reached just 34.1% of the outstanding stock, with USD 1,213 M awarded in the D30S6 at a price of USD 989.90 per USD 1,000 of face value and USD 141 M in the D30O6 at USD 986.00.
USD BONDS OPENED THE WEEK WITH BROAD-BASED LOSSES, with sovereign debt down 1.8% on average, as Bonares fell 1.9% and Globales 1.7%. The damage was concentrated in the long end, with the GD46 losing 2.9%, the GD38 2.4% and the AL35 2.3%, while the short end cushioned part of the adjustment. The move far outpaced EM debt, which only slipped at the margin, pointing to local factors behind the decline. Against that backdrop, country risk rose 27 bps to close at 506 bps. Bopreal notes were more defensive, edging down just 0.3% in MEP dollar terms.
PESO CURVES FELL FURTHER IN USD TERMS, with a clear slope by tenor. CER/TAMAR duals were hit hardest, down 1.9%, followed by CER notes, off 1.4%, and fixed-rate paper, down 1.3%; dollar-linked notes held up best but still slipped 0.9%, with the D31M7 down 0.3% in a session marked by the D31G6 swap. Liquidity remains tight, with overnight rates holding around 24% NAR, TAMAR at 24.56%, and short-dated fixed-rate paper yielding around 27% NAR.
THE OFFICIAL EXCHANGE RATE ROSE 0.4% TO CLOSE AT $1,494.13, up 0.4% so far this month. The financial rates moved more sharply: the MEP dollar gained 0.9% to $1,519.77 and the CCL dollar rose 0.9% to $1,574.91, with the spread at 3.6%. Separately, the BCRA bought USD 10 M on the day, taking August purchases to USD 339 M and USD 13,676 M so far this year. Gross reserves, meanwhile, rose USD 96 M to close at USD 49,592 M.
THE MERVAL FELL 1.7% IN CCL TERMS (-1.9% in pesos), closing at USD 1,840.8, in a session with selling extended across nearly the entire panel. Energy was the only sector higher, up 0.3%, while Industrials fell 4.4%, Materials 4.3% and Financials 3.8%. Among local shares, only YPF gained, up 1.0%, while Mirgor slipped 0.7%; Transener lost 6.2%, Transportadora de Gas del Norte 5.6% and Ternium 5.4%. On Wall Street, ADRs fell 1.8% on average, with AdecoAgro up 5.9% and Globant 2.9%, against declines in Bioceres (-4.7%), Corporación América (-4.2%) and YPF (-3.8%).
INDEC REPORTED THAT WHOLESALE PRICES (IPIM) ROSE 0.8% M/M IN JULY, decelerating from June's 1.1% and taking the year-to-date increase to 16.6%, with a 31.1% y/y change. The breakdown shows very uneven dynamics: primary products fell 2.2%, dragged down by crude oil and gas, which plunged 9.2% and subtracted 0.91 pp from the headline, while manufactured goods and electricity rose 1.8%, with electricity up 5.8%, motor vehicles 2.7% and chemicals 2.0%. Agricultural products rose 3.6%, contributing 0.39 pp, and imported goods gained 0.5%.
ON THE FISCAL SIDE, the National Public Sector posted a primary surplus of ARS 2.96 trillion and a financial surplus of ARS 244,897 M in July, in a month marked by heavy interest payments of ARS 2.72 trillion on Globales and Bonares coupons. Primary spending fell 7% y/y in real terms, and the year-to-date primary result stands at around 0.9% of GDP, versus the 1.4% target agreed with the IMF.
