Argentine Assets Find Their Feet: A Daily Recap of the Economic Stability Amid Volatility

On Thursday, Argentine assets experienced a calmer day as stocks recovered, bonds fell slightly, and the blue dollar remained above $1,400. The New York Stock Exchange was closed due to the U.S. Independence Day holiday, so Argentine stocks did not have the external reference of ADR movements. Despite this, the Merval index closed with a slight rise of 0.5%, representing a daily increase of 0.3% in dollars.

Shares traded mostly positively but with some losses on Thursday, with YPF rising 0.1%, Grupo Financiero Galicia remaining unchanged, Pampa Energía gaining 1.7%, and Banco Macro gaining 0.3%. This represents the third consecutive recovery after a shock experienced by shares in the previous week. Debt instruments moved in the opposite direction, closing with slight declines and leading to a marginal increase in country risk to 1,523 points.

Although the market expected the Central Bank to make official the new Letter of Monetary Regulation on Thursday, which had caused alerts in the investment world, the monetary authority did not express itself on this matter yet. Technical aspects of the standard are still being discussed with banks and various government actors. Economist Gustavo Ber mentioned that it is necessary to learn more about the new monetary plan and understand how much additional effort will be required from public accounts due to debt transfers from BCRA to Treasury accounts.

On a day of low volume, the Central Bank completed purchases for US$22 million in the exchange market and is now approaching its end of week with positive results of US$79 million. Operator Gustavo Quintana noted that local business volume was affected by U.S holiday resulting in lowest trading day this year.

In summary, while Argentine assets experienced volatility earlier this week, they stabilized on Thursday as stocks recovered and bonds fell slightly while debt instruments moved opposite way leading to an increase in country risk points .