Rates Ease as the FX Market Remains Calm

ARGENTINE ASSETS TRADED MIXED ON THE LAST DAY OF AUGUST, with the local market split between a hard-dollar curve lacking clear direction and a peso segment that repriced higher on the Treasury auction settlement day. Bonares advanced while Globales pulled back, with country risk pinned at Friday's levels amid a slightly softer emerging-market backdrop. The peso curve closed higher, with short-term rates steady and TAMAR easing, in a session where the Treasury returned liquidity to the system. The official exchange rate and the CCL both declined, the BCRA resumed dollar purchases, and equities led the session with broad-based gains both locally and in New York.

DOLLAR BONDS CLOSED WITHOUT CLEAR DIRECTION, and the sovereign debt average slipped 0.1%. Bonares rose 0.4% and Globales fell 0.4%, with gains concentrated in the mid- and long-end of the local-law curve and losses spread evenly across the New York-law curve. The move came against a slightly weaker external backdrop, with the emerging-market EMBI trading lower. Country risk closed at 512 bps, unchanged from Friday. Bopreal bonds, measured in MEP dollars, rose 0.1%.

PESO DEBT CLOSED HIGHER IN USD TERMS ON THE TREASURY AUCTION SETTLEMENT DAY, led by CER-TAMAR duals at 0.6%, followed by fixed-rate notes at 0.4% and CER-linked bonds at 0.3%, while dollar-linked notes gained 0.1%. The improvement was concentrated in the long end of both the fixed-rate and inflation-linked curves, with shorter maturities closing flat, a steepening consistent with the liquidity the Treasury returned to the system. Overnight rates held steady around 20% NAR, and TAMAR eased to 24.6% NAR.

THE OFFICIAL EXCHANGE RATE FELL 0.2%, closing at $1,509.47, up 1.4% for the month of August. The MEP rose 0.3% to $1,541.40 and the CCL retreated 0.2% to $1,598.56, with the implied spread at 3.7%. Separately, the BCRA bought USD 46 million on the day, bringing its August total to USD 769 million and its year-to-date total to USD 14,106 million. Meanwhile, gross reserves fell USD 1,534 million to close at USD 48,257 million, a decline reflecting the seasonal month-end reserve requirement effect.

THE MERVAL ROSE 2.3% IN CCL-DOLLAR TERMS, up 1.8% in pesos, closing at 1,906 points in hard-currency terms. The session saw broad-based gains, led by construction, financials and consumer staples, while consumer discretionary, materials and industrials lagged. On the local panel, Cresud rose 4.3%, Banco BBVA Argentina 4.3% and Banco Supervielle 3.4%, while Ternium fell 1.8%, Banco de Valores 1.3% and Transener 0.5%. New York-listed shares rose 2.4% on average, led by AdecoAgro at 6.0%, Grupo Supervielle at 5.2% and Bioceres at 4.9%, with Corporación América at 2.6% and MercadoLibre at 1.5% at the opposite end.