10 Tips from our weekly financial review

Photo by: eabff

1) “A black swan appeared and Frente de Todos swept through the PASO. The FF formula obtained 47.3% of the votes far exceeding the ruling party. Juntos por el Cambio could be imposed in Córdoba. The rest went to Alberto Fernández”

2) “Given this situation, the main thing is to prevent the crisis from getting worse. With a dollar that shot up quickly and after a Cabinet meeting, two measures were taken: raising the interest rate more than 10 points and selling more than US$ 100 million”

3) “Although the Leliqs rate increased to around 74%, the BCRA could only place $ 13,990 million with expiration of the amount of $ 257,062 million; that is, only 5.4% of the offer. And this It is not something new, when last year’s run occurred, it had already been noted that the effect of increasing rates did not curb the strong demand for dollars.

4) “The government must show dialogue with its opponents, in order to calm the market. Remember, there are long days from here to the elections with the challenge of keeping the economy at ease. One of the main challenges will be to deal with the Leliq”

5) “Therefore, it is necessary for the BCRA to give a strong signal of defense of the value of the peso. In this way, it may be more likely to renew the Leliqs and, by decreasing the perception of risk”

6) “There was also a political measure, the press conference of Macri and Pichetto from the Casa Rosada. However, no concrete measure was announced. Basically, the government backed its message of fighting until October by receiving the message of “punishment vote” they received. As for the market reaction, the government blamed the distrust generated by the opposition in the world giving the image of a low probability of facing the problems of
country fund. ”

7) “The arrival of the Fernandez to power is highly probable, but what will Fernandez lead? Alberto or Cristina? They can be two very different worlds. As this is still unknown, the uncertainty is high. If the leadership comes from the Alberto’s hand, the chances of it being a more reasonable government are greater, although neither
guaranteed. ”

8) “On the contrary, if the leadership comes from the hand of CFK the probabilities of a rational government diminish. And not to mention, if the “Vindictive Cristina” returns. However, it is fair to emphasize that the CFK message recorded in video was in conciliatory tone. Will it continue along the same lines if it is vice president? We will have to be very attentive to the statements of both Fernández.”

9) “The structural and macroeconomic problems of Argentina are still present. What changed is the idea of ​​who should face them. The key point remains the same govern who governs: make structural reforms so that the country regains competitiveness and can leave a time for all of the decline.”

10) “Why does the BCRA have to put” all the meat on the grill? “Because the worst case scenario is that a bank run begins and we are not far away. If they do not act on time, it will be impossible to stop. There is no room for possible error.”


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