La información más importante de este martes en un breve video
The peso could lose 25 percent of its value and bonds may slump about 20 percent on the results, according to BTG Pactual Argentina.
Argentina’s international bonds tumbled in London trading after a opposition candidate Alberto Fernández routed President Mauricio Macri in a shock primary election result.
The nation’s euro-denominated notes due in 2028 collapsed, sending the yield up almost three percentage points to 13.46 percent, the highest since the notes were sold, according to data compiled by Bloomberg. Opposition candidate Fernandez and his running mate, former president Cristina Fernandez de Kirchner, won by a much wider-than-expected margin over Macri, spooking investors who were already trimming exposure to Argentine assets as the October 27 presidential election nears.
Amherst Pierpont Securities warned of “panic” when local markets open. Others weighed the chances that the Central Bank will intervene to support the currency, which is already the worst-performer in emerging markets this year versus the dollar with a 17 pecent loss.
“For markets, this is very negative,” said Carolina Gialdi, a senior fixed-income strategist at BTG in Buenos Aires. “The market will likely price this as it is a done deal that Alberto Fernández won.”
The peso could lose 25 percent of its value and bonds may slump about 20 percent on the results, according to BTG Pactual Argentina. That would be a sharp turnaround from Friday, when bonds and locally traded shares gained amid optimism about Macri’s chances.
Traders fear the primaries are a signal the country may look to return to policies such as currency and capital controls, steering away from Macri’s more market-friendly positions.
In a press conference Sunday evening, Macri said he had “a bad election,” and that his coalition would work to change the trend. The president declined to say if he’ll announce special measures to calm markets or boost the country’s economy ahead of the first round vote.
Argentina’s 100-year dollar bonds fell, propelling the yield 80 basis points higher to 10.37 percent at 11.26am in London.
The view from outside
Here’s what money managers and analysts are saying:
Siobhan Morden, head of fixed income strategy for Latin America at Amherst Pierpont Securities:
Gene Frieda, a strategist at Pacific Investment Management Co. in London:
Julian Rimmer, a trader at Investec Bank Plc in London:
Per Hammarlund, the chief emerging-markets strategist at SEB AB in Stockholm:
More from BTG’s Gialdi:
Whitney Baker, founder of New York-based Totem Macro:
James Barrineau, the New York-based head of emerging-market debt at Schroders:
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