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ON TUESDAY, LOCAL ASSETS HAD A POSITIVE SESSION, with dollar-denominated sovereigns rising and country risk compressing to 508 bps. ARS-denominated curves also performed well, with gains across Lecaps, CER, dollar-linked, and Dual instruments. In the FX market, the official exchange rate rose while financial rates traded mixed. The BCRA purchased over USD 100M in the official market and gross reserves increased. In addition, the Government Confidence Index was released, showing a further deterioration.
ARS-DENOMINATED DEBT HAD A POSITIVE SESSION, led by dollar-linked instruments, which rose 0.2%, consistent with the increase in the official exchange rate. CER bonds were broadly flat, with slightly more pronounced moves at the long end, while Dual instruments were also little changed. Fixed-rate bonds lagged, slipping 0.1%.
DOLLAR-DENOMINATED DEBT HAD A FAVORABLE SESSION, rising 0.5% on average and outperforming emerging market peers. Globals gained 0.6%, led by the GD30 (+0.8%) and the GD46 (+1.7%), while Bonares rose 0.4%, with the AL41 posting the largest gain (+0.7%). As a result, country risk compressed to 505 bps. Bopreales also rose 0.3%.
THE OFFICIAL EXCHANGE RATE ROSE 1.0% ON TUESDAY, closing at ARS 1,407.90, now 24.4% below the ceiling of the exchange rate band (ARS 1,751.66). Financial FX rates traded mixed: the MEP fell 0.2% while the financial dollar rose 0.2%, closing at ARS 1,432.7 and ARS 1,489.6, respectively, with the spread at 4%. The BCRA purchased USD 112M, accumulating USD 1,952M in purchases for the month and USD 9,107M year-to-date. Gross reserves rose by USD 1,105M to USD 47,908M, driven mainly by an IMF disbursement of USD 1,000M.
THE MERVAL ROSE 2.8% IN PESOS AND 2.5% IN DOLLAR TERMS, closing at USD 1,964. Gains were broad-based, led by the financial and communications sectors, followed by construction and real estate. Among local stocks, Banco BBVA Argentina (+8.2%), Banco Supervielle (+6.1%), and Banco Galicia (+5.1%) led the gains, while Transener (-1.9%), Transportadora Gas del Norte (-1.3%), and TGS (-0.4%) were the only decliners. Among NYSE-listed stocks, the average rose 2.7%, with BBVA (+8.6%), Telecom Argentina (+7.8%), and Grupo Supervielle (+6.6%) as the top performers, while Globant (-4.3%), AdecoAgro (-1.9%), and Vista Energy (-1.4%) posted the largest losses.
TORCUATO DI TELLA UNIVERSITY RELEASED THE MAY GOVERNMENT CONFIDENCE INDEX (ICG), which fell 1.6% month-over-month and 18.7% year-over-year, extending the streak of consecutive monthly declines in 2026 to five and accumulating a 19.2% contraction since December. Among the components, Administrative Capacity hit a new low for the current administration, while Honesty and General Interest registered their worst readings of the year; Efficiency and Overall Assessment showed slight recoveries. The decline was concentrated among women (-13.0% m/m) and the 30-to-49 age group (-11.3%), while men and those over 50 showed increases. Geographically, the Interior leads in confidence, with Greater Buenos Aires as the most lagging segment.
