Argentine Statistics and Census Institute (INDEC, in its Spanish acronym) has devastated bonds, leaving them more vulnerable to what happens across the world with US rate hike. Although Argentine papers managed to rally slightly on Friday, it was not enough to make investors optimistic.
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Distrust of Argentine papers has transferred to country-risk, which has climbed to 293 points (record level).
Nowadays, Argentine bonds have to compete with US Treasury papers, which have raised their rate to 5.11 per cent. This forces domestic papers to yield more so as to be appealing. One of way in which peso-denominated bond rate may rise is by price drop. The other one is through opener inflation-adjusted bonds, reflecting real INDEC data.
Attention
Investors will also devote their attention to GDP coupon, since it does not adjust by prices, rather by economy growth.
These coupons settle at the same level posted at the beginning of May, and, during the last week of May, they broke all-time records. Now, these derivatives are in good position to revert drops.
The remaining bonds will trade as eagerly as all global markets, awaiting US May inflation.
All emerging countries' papers were severely lashed by US rate hike. Only Brazil managed to escape from such impact, since its bonds remained neutral. Ecuador keeps on leading ranking of risky countries with 639 points, while Egypt is the most reliable nation among emerging ones with only 39 units.
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