Argentine bonds plunge 2%

Argentine bonds plummeted yesterday, sliding more than 2 per cent. US Treasury bond yield, which ended at 5.29 per cent (the highest level in five years), is an unbearable burden for domestic papers, since they have already been lashed by INDEC effect.

Debt swap papers were severely hit, since they are the most volatile ones because of their long term. Discount in pesos lost 2.20 per cent and Par in the same currency, 2.65 per cent. In foreign lands, these bonds in dollars plunged around 2 per cent.

GDP coupon closed with a falling trend: 1.17 per cent. The only positive thing about this collapse was that such derivative did not end at minimum price of yesterday's session, since it rallied during the last hour and held few transactions.

Lower volume

Bond volume hit lower than Monday's: between the Electronic Over-the-Counter Market (MAE, in its Spanish acronym) and Buenos Aires Stock Exchange, ARG$2.06 billions were traded, 20 per cent less than on the previous day. During the last hour, ARG$200 millions were traded because opportunity buyers turned up. "Several banks faced drops," a trader said.

Post-default bonds in Argentine pesos endured slighter drops and scored some rises. BOGAR (-0.75 per cent) together with BOCON PRE8 and PRO12 (-0.50 per cent) were the most affected papers. It was surprising to see peso-denominated BODEN 2014 to climb 0.30 per cent. The new BONAR in pesos bidden last week crumbled 0.25 per cent, now offering an around 12-per cent yield. Dollar-denominated bonds put up no resistance to drop. BONAR X was the one lashed the most, by losing 1.70 per cent.

Overvalued dollar

While dollar was strengthening across the globe, in Argentina, the American currency showed it's overvalued. Argentine Central Bank (BCRA, in its Spanish acronym) was forced to hold it with strong purchases, increasing reserves by $270 millions to $41.64 billions, since BONAR's dollars came in. In Forex-MAE (foreign exchange market where banks trade), dollar closed at ARG$3.074, like the previous day. In exchange agencies, the American currency continued at ARG$3.10. Dollar is highly offered for today, forcing Central Bank to hold it. After close, sale orders summed $100 millions, while purchase ones only $12 millions.