LOCAL MARKETS MOVED AGAINST THE EXTERNAL GRAIN, as emerging market debt closed higher while Argentine dollar sovereigns lost ground again and country risk stretched to a new three-month high, led lower by local-law bonds. In pesos, the session showed a defensive bias in the short end, which sold off against long-dated and dual bonds, a sign the market sees no room for a rate cut in the near term. The official exchange rate kept drifting higher and dragged the financial dollars along with it, with the BCRA buying a marginal amount of currency. In equities, the local panel ended in the red, in contrast to Argentine stocks listed in New York.
DOLLAR BONDS CLOSED LOWER, with hard-dollar sovereign debt down 0.2% on average, decoupling from emerging market debt, which traded higher. Weakness was concentrated in local-law bonds: Bonares fell 0.5% while Globales gave up just 0.1%, with a mixed performance within the NY-law curve, where the GD29 rose 1.0% and the GD46 0.6%, in contrast with the AL41, which sank 1.3%, and the AL30, which lost 0.6%. Against this backdrop, country risk added 6 bp to close at 517 bp, its highest level in three months.
PESO CURVES ENDED MIXED IN USD TERMS, as CER-linked duals to TAMAR led with a 1.8% gain, followed by CER bonds, up 0.0%; dollar-linked notes edged down 0.1% and fixed-rate paper fell 0.4%. Repo (caución) traded between 27% and 30% NAR, well below short-end yields, which helps explain the selling pressure on those maturities.
THE OFFICIAL EXCHANGE RATE ROSE 0.2%, closing at $1,497.53 and bringing its August gain to 0.6%. The financial dollars followed suit: the MEP rate advanced 0.3% to $1,523.94 and the CCL rate gained 0.1% to end at $1,576.57, leaving the spread (canje) at 3.5%. The BCRA bought USD 15M on the day, bringing its August total to USD 355M and its year-to-date total to USD 13,692M. Separately, gross reserves rose USD 410M to close at USD 50,002M.
THE MERVAL FELL 0.6% IN PESOS AND IN CCL DOLLAR TERMS, closing at USD 1,829.7 in a selective session where the local panel failed to sustain its momentum. At the sector level, Real Estate, Consumer Staples and Construction led gains, while losses were concentrated in Financials, Consumer Discretionary and Energy. Among local stocks, Cresud stood out with a 5.1% gain, Sociedad Comercial del Plata with 3.7% and IRSA with 3.3%, while the steepest declines were for Banco BBVA Argentina, down 2.7%, Ternium, down 2.1%, and Banco Supervielle, down 1.8%. New York-listed shares outperformed, up 1.2% on average, led by Adecoagro with 7.7%, MercadoLibre with 7.3% and Globant with 5.9%, while BBVA and Vista Energy, both down 1.9%, and Galicia, down 1.5%, lagged.
