ON WEDNESDAY, LOCAL MARKETS HAD A MIXED SESSION. In a day where the BCRA purchased below the monthly average, official and financial exchange rates rose. Gross reserves declined. Dollar-denominated sovereigns closed slightly lower. In local currency, both CER and fixed-rate debt posted slight declines, while Dollar-Linked bonds advanced. The Merval ended higher, with banks and telecoms leading gains. Lastly, the May fiscal result was published, showing the government achieved another primary and financial surplus.
DOLLAR-DENOMINATED SOVEREIGNS FELL 0.3% ON WEDNESDAY. Globals led the decline with a 0.4% drop, dragged down by the GD35 (-0.9%), while Bonars slipped 0.2%. With this performance, country risk closed at 428 bps. BCRA debt, on the other hand, advanced 0.2%.
ARS-DENOMINATED DEBT POSTED BROAD-BASED DECLINES, with Dollar-Linked bonds as the exception, rising 0.2%. CER bonds fell 0.5%, Lecaps declined roughly 0.4%, and Duales fell 0.4%.
THE OFFICIAL EXCHANGE RATE ROSE 0.5%, accumulating a 2.1% gain month-to-date. Financial rates moved in tandem: the MEP gained 0.3% and the financial dollar advanced 0.4%, closing at $1,458.8 and $1,502.3 respectively, with the spread holding at 3%. The BCRA purchased USD 34M in the MLC, below the pace of prior days, accumulating USD 986M in June and USD 10,742M year-to-date. The daily average of purchases has been decelerating: USD 82M in June, down from USD 134M in May and USD 138M in April. Gross reserves fell USD 157M to USD 47,508M.
THE MERVAL ADVANCED 1.1% IN PESOS AND 0.6% IN DOLLAR TERMS, closing at USD 2,191. Financials and telecoms were the only sectors in the green. Among individual stocks, Telecom (+3.1%), BYMA (+3.0%), and BBVA (+2.8%) led gains, while Cresud (-3.2%), TGN (-1.9%), and Mirgor (-1.8%) led losses. Among ADRs, banks dominated the session: BBVA (+6.4%), Galicia (+4.5%), and Supervielle (+4.2%) were the top performers, while AdecoAgro (-3.1%), Ternium (-1.4%), and Globant (-0.7%) closed in the red.
THE NATIONAL PUBLIC SECTOR RECORDED A PRIMARY SURPLUS OF ARS 1.92 TRILLION IN MAY AND A FINANCIAL SURPLUS OF ARS 478.6 BILLION, after interest payments of ARS 1.45 trillion. In real terms, the primary surplus fell 14.9% year-over-year and the financial surplus 45.7% year-over-year, reflecting a higher interest burden than in the prior year. On the revenue side, tax revenues rose 30% year-over-year in nominal terms but fell 4.1% in real terms: the increase was driven by Corporate Income Tax (+72.5% y/y), boosted by corporate tax payment deadlines, while VAT fell 10% and export taxes declined 17.4% y/y following the reduction in agricultural withholdings. Primary spending fell 2.2% in real terms year-over-year, failing to offset the revenue decline. During the month, a transfer of BCRA profits of ARS 24.4 trillion — corresponding to fiscal year 2025 — was also recorded, aimed at reducing Treasury debt with the monetary authority. In the first five months of the year, the SPN accumulated a primary surplus of approximately 0.7% of GDP and a financial surplus of 0.2% of GDP.
