February 24, 2024 1:12 pm
Monday Meeting: Wall Street Banks to Monitor Government Bonds and Investments

In the wake of Congress’s defeat of the ruling party and market uncertainty due to the fall of its first law, major Wall Street banks are set to embark on a trip to Argentina starting tomorrow. The visit will be led by representatives from Barclays, Bank of America, Citigroup, Goldman Sachs, and HSBC along with clients, mostly investment funds.

The banks’ research departments are hoping to meet with government officials such as Luis Caputo, Pablo Quirno, Santiago Bausili, and Vladimir Werning. However, they maintain that this trip is part of an annual series of visits organized in different countries in the region.

Investors are coming to monitor sovereign bonds that several funds bought last December after Javier Milei’s rise to power. With her promises to advance a shock plan, dollar titles rose up to 14%, but last week they fell to almost 7% after the setback suffered by the omnibus law and the war unleashed with governors.

The banks’ representatives will be discussing possible investments in Milei’s program as well as prospects for bonds. Some investors will be considering selling their bonds while others will be looking at buying new ones. However, all investors have common interests in sovereign bonds, mostly corporate or sovereign debt.

Recently JP Morgan issued cautionary signals about Argentina due to double-digit inflation until the first quarter and a jump in the official dollar in June. They warned that “the main risks are governability and the population’s tolerance for adjustment.” They considered the rejection of the omnibus law an unprecedented event and urged that “the administration should recalculate its political strategy” before it could lead to greater volatility impacting the exchange rate gap.

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