Country risk drops below 600 points and sovereign bonds continue to rise

Financial markets began the week with a strong signal of confidence in the Argentine economy. Sovereign bonds in dollars rose sharply again, while country risk broke through the 600 basis points barrier, its lowest level in months.

According to official records, the indicator prepared by JP Morgan stands at 596 points, after having closed the previous Friday at 636. The movement responds to the widespread rebound of Global bonds under New York Law, which consolidates post-election optimism and the expectation of greater macroeconomic stability.

Global Bonds Rally

Among the main benchmarks, Global 29 rises 1.39% and trades at USD 87.48, while Global 30 advances 1.58% and stands at USD 83.56. Meanwhile, Global 38 appreciates 1.63% (USD 75.86), Global 35 gains 1.48% (USD 72.53), Global 46 climbs 1.54% (USD 70.70), and Global 41 rises 1.60% to USD 67.51.

The rebound directly impacts the decline in the risk premium and encourages expectations regarding future official interventions in debt and reserves policy.

Expectations and Recovery

After the legislative elections, investors reconfigured their portfolios in light of the new political climate. The Minister of Economy, Luis Caputo, reaffirmed to funds and operators in New York the Government's intention to resume bond buybacks and accelerate the accumulation of international reserves, within the framework of the exchange rate band regime.

That message was interpreted as a gesture of continuity in macroeconomic order and a commitment to strengthen the Central Bank's coffers, a pillar of the official strategy.

For Delphos Investment, "the path to economic growth in Argentina finally seems clear. The combination of macroeconomic order, a political shift toward consensus, and a new legislative composition favorable to structural reforms creates an unprecedented scenario of stability and projection."

In the same vein, brokerage firm Cohen highlighted that the local market is experiencing a phase of lower volatility, with rate adjustments and an exchange rate that remains firm.

Meanwhile, Wise Capital points out that the reduction in the exchange rate gap accompanies the bond rally, while Central Bank interventions and lower demand for hedging keep exchange spreads at their lowest levels in recent months.

Outlook

Economist Salvador Di Stefano anticipates that, in the coming months, interest rates should decrease substantially to reactivate credit and consumption. He also emphasizes that negotiations with the United States could facilitate support for debt buybacks and improve external financing.

From Fundación Mediterránea, Jorge Vasconcelos stated that electoral support for the Government and good rapport with Washington clear the outlook, although he recalled that "the process is just beginning."

The stock market is also following the trend: Merval keeps an upward trajectory, while Balanz Capital and ActivTrades see buying opportunities and potential all-time highs in the short term.