Argentine country-risk rockets 42%. Wary eye on US data

US indicators to be revealed this week will be an acid test for market. Data on consumers' trust and spending, third-quarter GDP and housing sale and resale in October will be disclosed. Each of them will have a strong impact on investors' mood.

Last week was short, though intense. Thursday and Friday holidays forced a pause, but markets will trade at full speed again today. We'll have to see how investors' mood has ended.

Dow Jones settles 1,000 points below its all-time record (14,198.10 points) beaten last October 11. In bond market, yield of US Treasury 10-year bonds lowered 4 per cent against 4.15 per cent one week before. Jitters may arise on Wednesday and Thursday, when figures of existing housing resale and sale of new ones will be disclosed.

"We aren't safe from new depreciations in banks' assets, from $5 to 10,000 millions, as a consequence of their exposure to subprime," Mace Blicksilver, the analyst from Marblehead Asset Management, warned.

Tomorrow investors will be able to see how consumers' trust is doing. On Friday, shops' spending will be revealed, when season of year-end purchases starts, crucial for consumption, main driving force of US growth.

As regards interest rates, "most investors forecast a quarter-of-point cut," Michelle Meyer and Ethan Harris, analysts from Lehman Brothers, signalled, who see such low as inevitable.

Another thermometer of economy health, second assessment of GDP for the third quarter, will be disclosed on Thursday.

Argentine bonds' outlook is not the best one. Change in the way Argentine Statistics and Census Institute (INDEC, in its Spanish acronym) will measure prices is the final stroke which will take sovereign instruments to ruins and is, in fact, the officialization of breach of contract with holdouts.

As market expected this, country-risk has climbed 42 per cent so far November and bonds' values have plummeted 15 per cent. Instruments have fallen more than 25 per cent in the year, making credit to Argentina increasingly expensive.

Argentina's country-risk settles nowadays at 445 units. Last week, it zoomed 11.25 per cent. At the beginning of the month, it hit 313 points.