Bonds dip 1.70%

This time, German bonds are to be blamed for global collapse, which have passed their weakness on to US Treasury papers, raising their rate to 5.15 per cent from 5.06 per cent. This situation in turn caused Wall Street to plummet. Dow Jones slid 1.07 per cent and NASDAQ, 1.02 per cent.

As investors are afraid of a spell of high rates to fight inflation (already hinted at in Europe and not lowering in US), they have decided to get rid of the riskiest assets, like stocks.

Not even $1.25 fall in oil prices has managed to calm down investors, who have also started to get rid of emerging countries' bonds. When US bond rate rises, no good piece of news is enough: Wall Street plunged during a day when the chain Home Depot carried out REPOs of stocks and the business bank Morgan Stanley disclosed good results.

In fact, JP Morgan stocks (matrix of said business bank) went as far as to rise more than 2 per cent, but they closed 0.5 per cent down. "Financial markets' fear of an unstoppable increasing inflation is leaking," Michael Yoshikami¸ president and investment strategist chief for YCMNET Advisors, in Walnut Creek, California, stated. "A spillage from Bunds (German bonds) to Treasury bonds has been posted," he added.

The Swedish bank Riksbank has raised its key rate by 0.25 per cent, while minutes of the last monetary policy meeting of the Bank of England have signalled that British rates may leap again in July.

In Argentina, investors also got the jitters. Debt swap bonds plunged to 1.70 per cent; GDP coupons lost 1.50 per cent; and post-default bonds showed slight retreats ranging between 0.15 per cent and 0.30 per cent. BOGAR was severely lashed, falling 1.40 per cent, since several foreign investors decided to get rid of this paper, which is the one attracting foreign dollars the most, given its good relation between rate and duration.

In dollars

Dollar-denominated bonds had a poor trading, though BODEN 12 managed to rise 0.45 per cent.

Peso-denominated BONAR (bade just a few weeks ago) also slumped. It fell 0.30 per cent, though its price is higher than debut's value, when it was accepted at ARG$95.50. Now, it's worth ARG$95.70.

Trading amount crashed 35 per cent. Between the Electronic Over-the-Counter Market (MAE, in its Spanish acronym) and Buenos Aires Stock Exchange, ARG$2.05 billions were traded.

Under these circumstances, dollar found buyers. Banks accompanied Argentine Central Bank (BCRA, in its Spanish acronym). The monetary authority bought more than $100 millions, raising reserves to $42.47 billions. Wholesale dollar closed at ARG$3.078, after opening at ARG$3.075. The American currency was stable from the very first minute. In exchange agencies, it continued at ARG$310 for sale. In Forex-MAE, where $578.7 millions were traded (the second highest volume of history), strong buyers came up at opening. Bid never slid from $100 millions.

Dollar is really firm for today. Demand holds $130 millions, while sellers only come to $25 millions.

Dollar futures were affected by cash price rise. For the end of the month, dollar is worth ARG$3.081 (+0.15 per cent) and for the end of the year, ARG$3.1140 (+0.16 per cent). Today's session is crucial, since market does not know whether US Treasury rate will stay at those levels or it will resume the falling curve posted till Tuesday.