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ON THE DAY FOLLOWING THE AUCTION IN WHICH THE TREASURY ABSORBED ROUGHLY ARS 3.1 TRILLION FROM THE SYSTEM, the local currency debt market posted a broadly negative session across segments. CER-linked bonds declined by around 1.0%, while both the fixed-rate curve and dual bonds fell by approximately 0.8%. Dollar-linked instruments, however, fell by about 0.3%. Meanwhile, overnight rates remained broadly stable, hovering around 20% TNA.
SOVEREIGN DEBT IN USD CLOSED DOWN AGAIN BY 0.3%, UNDERPERFORMING EMERGING MARKET DEBT IN A VOLATILE SESSION DRIVEN BY THE MIDDLE EAST CONFLICT. The long end was the most affected, with declines of up to 1%, while the short end edged up by just 0.1% on average. With this performance, country risk rose again to 637 bps, the highest level recorded so far this year. Meanwhile, BCRA debt remained resilient and posted marginal gains.
THE OFFICIAL EXCHANGE RATE ROSE 1.4% TO ARS 1,394.92, STANDING 18.6% BELOW THE UPPER BAND. The increase occurred even after the Treasury absorbed pesos in its latest auction and amid strong agricultural FX inflows (USD 213 M), leaving open whether this is a temporary move or a shift in the trend observed in recent days. Financial FX rates also moved higher, with the MEP rising 0.6% and the CCL up 0.5%, closing at ARS 1,434.8 and ARS 1,488.6, respectively, while the spread remained elevated at around 3.8%. Meanwhile, the BCRA stepped up its pace of purchases in the official market, buying USD 208 M and bringing total purchases to USD 1,531 M in March and USD 4,246 M year to date. Gross reserves, however, fell by USD 331 M to USD 43,381 M.
THE MERVAL ROSE 0.9% IN PESOS, BUT FELL 1.6% IN USD (CCL TERMS), CLOSING AT USD 1,886. Once again, a pattern of weakness in banks and strength in energy stocks was observed. Supervielle (-7.0%), Telecom (-5.4%), and Galicia (-4.9%) posted the largest declines, while YPF (5.4%), Ternium (2.7%), and COME (1.5%) recorded the biggest gains. Argentine companies listed on Wall Street fell 1.6% on average, led by Bioceres (-7.3%), Supervielle (-4.7%), and Galicia (-4.1%). Meanwhile, the top performers were YPF (3.4%), Vista (2.6%), and TGS (1.7%).
