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JANUARY INFLATION ONCE AGAIN CAME IN ABOVE MARKET EXPECTATIONS. The national CPI rose 2.9% m/m (32.4% y/y), exceeding both the 2.4% estimate from the REM survey and the 2.2% implied by bond pricing. The increase was driven mainly by seasonal components, which accelerated to 5.7% m/m (from 0.6% in December), with gains concentrated in vegetables and hotels. In contrast, core inflation slowed from 3.0% to 2.6% m/m, while regulated prices also moderated, easing from 3.3% to 2.4% m/m amid smaller increases in meat prices, fuel, and public transportation. By type of goods, services rose 3.1% m/m and goods 2.8% m/m, compared with December readings of 3.4% and 2.6%, respectively.
DOLLAR-DENOMINATED SOVEREIGN BONDS ROSE 0.2%, UNDERPERFORMING EMERGING MARKET DEBT, with gains concentrated in the Bonares, which advanced 0.4%, while Global bonds traded broadly flat. With this performance, the country risk stood at 509 basis points. Meanwhile, Bopreal bonds gained 0.5%.
LOCAL CURRENCY DEBT POSTED A POSITIVE BUT MIXED SESSION, SHAPED BY JANUARY INFLATION COMING IN ABOVE MARKET EXPECTATIONS. In this context, CER-linked bonds attracted most of the demand and rose by an average of 0.2%, with stronger performance at the short end of the curve—particularly the 2026 segment, which gained 0.4%—while dual bonds also stood out with a 0.4% increase. By contrast, the fixed-rate curve edged down 0.1%, and dollar-linked bonds extended their losses, falling 0.6% in line with the correction in exchange rates. Despite the less favorable inflation reading, overnight rates showed a slight easing and closed around 23% TNA.
THE OFFICIAL EXCHANGE RATE POSTED A SHARP DECLINE OF 1.3% AND CLOSED AT ARS 1,405.4, REMAINING 12.4% BELOW THE UPPER BOUND OF THE TRADING BAND. Financial dollar rates followed with more moderate declines, with the MEP falling 0.4% and the CCL down 0.3%, closing at ARS 1,436.7 and ARS 1,477.6, respectively. Meanwhile, the BCRA once again purchased foreign currency in the official market for USD 42 M, bringing net purchases to USD 1,693 m so far this year. Gross international reserves, however, fell by USD 91 M to USD 45,232 M.
THE MERVAL ROSE 2.8% IN PESOS AND GAINED 3.2% IN DOLLAR TERMS, CLOSING AT USD 2,071. The advance was driven by the banking, construction, and energy sectors. The top gainers were Pampa, TGN, and TGS, with increases of between 5.0% and 6.0%. There were no significant declines. Argentine stocks listed in Wall Street posted a more moderate gain of 1.1% compared with the local market. Bioceres, Galicia, and TGS rose between 2.6% and 3.6%, while MELI declined 1.0%.
