Tuesday , January 31 2023

Who pays the bill to increase country risk? Macri or Cristina? – 12/22/2018



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It was not a surprise for the most experienced traders in the market: in recent days Argentinean was the strongest seller of national bonds.

This tendency, after weeks, weakens these documents because of the sale of large foreign funds Cristina Kirchner I could win the elections. That would have been another way Mauricio Macri I can lose them.

Raising the country's risk rating is 800 points (meaning Argentina) 8 points higher than US bonds US Federal Reserves raised the reference rate by a quarter to reach an annual rate of 2.25% / 2.50%.

US rate increase The "ground" of financial costs for the worldEspecially for developing countries, and in this case, in recent weeks, the country has risen sharply to Argentina.

In terms of banks, operators and investors, the risk of climbing the country from 600 to 700, political expectations.

They have read the government's election strategy, their support for their views Jaime Durán Barba The principal principal political advisor of the president will be based on the encounter with the former president and in matters of finance that Cristina Kirchner faces in the financial world.

For the sake of finance, it is the victory of the former president Refuses the IMF, re-planning its unilateral debt, deepening of policy of return and control of capital control with non-related companies.

The logic of deepening policy deficit was followed by an increase in the risk of Cristina. This is a message from the former president, who has made some friends more friendly, but keeps the position of the former minister. Axel Kicilloff Meet again with the IMF's power position. What will be alternative funding?

Like a dog who tends his tail, Cristina's fear of raising the country's risk increases the doubts about the Government's capabilities. Re-activate the economy In case there are no opportunities to go to the markets to earn money.

Will offer a bond that expires in 2019It's between 12 and 14% per year is the most open economic indicator relatively inexpensive but reflects uncertainty before the election year and occurs at a certain time.

There is an improvement in the official mood during the last four weeks of the calmness of the stock market. In November, for example, the purchase of individual tickets was significantly reduced (they were 408 million US dollars, the lowest since 2015).

The stock market stabilization is probably the best economic news of a year when devaluation is a breakaway of economic activity.

It is also mentioned in the manufacturing industry and construction industry 40/50% of the main product falls.

Articles real wages decreased by 10% and a 5% loss of food sales.

After encountering this scenario, Casa Rosada has prepared a chart that provides growth forecasts, 1% monthly salary bill 7.8% of retired people in December and deep-seated parity policies will be added to two strong players who have opposed positions and policies.

Ministry of Production Dante Sica She said she had already hoped for that salary increase 23% however, those close to the economy Nicolas Dujovne they should know that, Minister It is estimated that the next year inflation will drop to 28-30%.

The IMF expects to follow up on the policy of raising interest rates and payouts last week, but everyone in the election said they did not think the same.

For example, there are talks in Buenos Aires province loosen the hardness of wages and without hesitation in the application "trigger point" to update government spending as a result of inflation, including teachers.

We have to do it in 2019 We've put more money into people's pockets it is clear in most of those emerging as the main candidates to the ruling party; That's why the climate change in Casa Rosada comes out.

Once again, a certain change in Argentina emerges after the dreams of sincere bilateral parties, and more than a year after a run that reflects political desires on the edge of the storm.

At the end of the year, more calm, but a strong increase in country risk creates tension in Cristina Kirchner's possible candidacy and economic costs for Mauricio Macri's administration. In addition, the question puts the electoral theory into question.

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