Argentine Assets Suffer Steep Decline Amidst Holiday Extensions and Escalating Country Risk Indicator

Amidst the extended holiday period, Argentine assets are experiencing a sharp decline in the United States. The country risk has escalated to 1,410 basis points, as measured by JP Morgan on a daily basis. This indicator reflects the excess cost of Argentine debt compared to the yield of the United States Treasury. Just two months ago, the country risk had dropped to 1,148 basis points, the lowest level seen during Javier Milei’s management.

Recent days have seen slight declines in bonds and an average drop of 10% in stocks in the month of June. Banco Galicia experienced drops of up to 4%, followed by Supervielle at 3.9% and Macro and BBVA at 3.2%. On the stock side, amidst minor falls in the Dow Jones, ADRs are all showing losses. Exporters are dissatisfied with the current exchange rate, leading to lower supply, while demand for imports is increasing. This disruption in the recovery process of Argentine assets comes after significant increases following the change of government, with some assets seeing up to 100% growth.

The rise in country risk is a result of a new fall in Argentine bonds, which are currently dropping between 0.3% and 0.5%. The crypto dollar remains stable at $1,300