Financial week: the free dollar was “priceless” while waiting for the results of the elections and the cash with liquid exceeded 1,000 pesos

The week before the presidential elections ended with a climate of high expectation and pause in business, awaiting the definition of the polls that will determine the political and economic future of the country for the next four years.

From a financial point of view it will be a “hinge” or “watershed” in the very short term: an ruling party with a chance of fighting in a second electoral round on November 19 will give the Government some air to carry out controls, interventions and inspections to tighten the reins on the stock and exchange markets. A ruling party outside the ballot would open the floodgates of an exchange rate rungiven the panorama of the outflow of deposits in dollars, disarmament of fixed terms in pesos and non-existent reserves, with an administration without political power to impose itself on the market.

He free dollar closed with a testimonial price of 900 for sale (down 80 pesos or -8.2% weekly), far from its nominal maximum of $1,050 last week. However, the banknote did not register genuine operations between Wednesday and Friday, with a great disparity in values ​​and exchangers who before - and after a series of controls by inspection organizations in the microcenter and cities of the interior in the last hours - chose to withdraw from the square. In some “caves” in downtown Buenos Aires, only purchase operations were carried out with a floor of 1,000 pesos on Friday, which gives the pattern of the bullish momentum that the currency could have in the coming days.

A clear signal of the search for coverage by financial agents was given by the dollar “cash with settlement”used for the externalization of foreign currency, which exceeded the 1,000 pesos in the average of Argentine shares traded in dollars on Wall Street (ADR). On Friday it closed at record of $1,035.14 on averageAs reported Reuters. With Cedear (certificates of deposit of shares of foreign companies operated in pesos on the local stock market) the “liqui” shot up above 1,100 pesos.

The “cash with liquid” with bonds in the controlled PPT (Priority Price Time) segment of ByMA ended at $924.95 (+3.2% weekly) with the Bonar 2030 (AL30C) at 48 hours, while the MEP dollar with the same title (AL30D) ended at 899.40 pesos (+3.3%). The Central Bank intervenes in this place, which delivers foreign currency through the purchase of public securities. Meanwhile, the “liqui cash” in the market segment that had the highest volume, in the Senebi (Bilateral Negotiation Segment) between private parties ended $945.19 in immediate cash.

“The last week saw cash with settlement again climbing to highs and the gap marking a new record of 185% with some pauses as the days went by, although continuing with an upward trend explained by the uncertainty regarding the outcome of the elections. this weekend, which in turn will have an outstanding impact on the future of the currency. The chances of victory for a candidate who promises dollarization will continue to push dollars upward, although to different magnitudes if the result is finalized on Sunday or if uncertainty continues until a runoff," the report indicated in a report. IEB Group (Invest in the Stock Market).

The wholesale dollar remained almost fixed, as has happened since August 14, to close at 349.95 pesos. “In the week that has just ended, limited by the Monday holiday, the wholesale exchange rate did not register a variation with respect to last Thursday's closing,” he indicated. Gustavo QuintanaPR agent Corredores de Cambio.

“The 'contado con liqui' and the parallel quotes of the currency would have high-octane fuel to reach a threshold comparable to that of other historical crises. The amplification of the gap to levels not seen since the 'Rodrigazo' would make any attempt by the Government to maintain the exchange rate at 350 pesos unsustainable. Paying early the political cost of a devaluation with inflationary acceleration would be inevitable for this management in these terms,” he explained. GMA Capital in a report.

Throughout the week, the monetary entity ended with net sales of USD 142 million in four operational wheels due to the holiday on Monday the 16th. In this way, so far this October the BCRA records net sales of 860 million of dollars.

The index S&P Merval of the Buenos Aires Stock Exchange ended close to its record in pesos, in the 800,804 units. On Thursday morning it marked a nominal maximum of 834,791 points. In this way, the leading actions panel gained 5.3% in pesos in the four operational sessions, although measured in dollars “counted with settlement”, the implicit parity in the price of Argentine ADRs on Wall Street, lost 1.8 percent.

The outlook for dollar bonds turned out to be better. The Global securities of the exchange - in dollars with foreign law - advanced 3% on average, with a risk country of JP Morgan that subtracted almost 100 units since Friday the 13th, to 2,412 points basics for Argentina.

“Anticipating market reactions in this context is also difficult: the basic market mechanisms are broken, either due to the government's decisive intervention in key prices or due to the restrictions that the operation of the main hedging assets currently registers,” the analysts evaluated. of Consultatio Financial Services. “In very general terms, we see that the market prices of financial assets discount what they know: in cash with settlement and bonds in pesos, a scenario relatively similar to that of the PASO where the dollarization scenario is included with a very low chance or very deferred. in the time. In dollar bonds, a similar scenario regarding the chance of dollarization, aggravated by the fiscal deterioration of the last two months," they noted.