Argentine bonds rise and the stock market falls: expectations for the Clean Sheet, the dollar, and the electoral climate

This Wednesday, the Argentine financial market opened with mixed results: while dollar-denominated sovereign bonds posted an average gain of 0.6%, the S&P Merval index fell 0.9% to 2,110,000 points . The stock market decline occurred alongside a climate of anticipation for local and international signals, especially regarding the dollar and the ongoing economic reforms.

On Wall Street, the major indices are up around 0.5%, with Argentine stocks trading mixed. Among the ADRs listed in New York, IRSA leads the gains with a 3.2% increase, while Loma Negra falls 2.5%. Country risk remains close to 700 basis points.

One of the factors driving bonds is the Treasury's repurchase of non-transferable bonds held by the Central Bank , using part of the recent IMF disbursement. According to Max Capital, instruments maturing in 2025, 2026, and 2029 were repurchased for a total of USD 12 billion, which will reduce the Treasury's accounting debt stock, although the consolidated public sector debt remains unchanged.

The measure is part of the BCRA's financial consolidation program and the institutional strengthening program agreed upon with the International Monetary Fund. Of the USD 20 billion granted by the multilateral organization, USD 12 billion has already been disbursed and utilized as part of this strategy.

Following the partial lifting of the currency controls, the exchange rate began to show signs of convergence. Pilar Tavella , an economist at Balanz, indicated that this trend is driven by arbitrage and flow adjustment. "The different exchange rates tend to align within a range close to the center of the band," she noted.

The market expects that, within this new framework, the exchange rate gap will remain narrow, consolidating a scenario of greater stability that reinforces predictability for the coming months. The Central Bank has also received signs of confidence from the private sector regarding the new monetary system.

In this context, analysts anticipate a positive trend for sovereign bonds. Walter Morales , president of Wise Capital, projected a compression of country risk to levels between 450 and 400 points, which would open up room for significant increases in the most representative bonds.

"The AE38, for example, could climb to 19% in the next twelve months," Morales said. For the economist, there will be two key moments for the debt market: July, when coupons are paid, and October, after the elections, if the ruling party consolidates its political support.

The electoral scenario adds another component to market decisions. Gustavo Ber , economist and financial consultant, stated that investors pay special attention to political signals: "The upcoming elections in districts like the City of Buenos Aires and the province will be crucial for gauging support for the reform agenda."

Ber believes the key will be to observe how legislative majorities are formed and whether the government manages to build the political muscle necessary to sustain the economic path without setbacks.