Argentine bonds surge after government unleashed debt reform framework


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Argentine bonds surge after government unleashed debt reform framework

On Friday, the 20th of September 2019, Argentine sovereign bond prices rose sharply, squeezing up risk spreads after the government of far-right Mauricio Macri had proposed a debt renegotiation outline in to the Argentine Congress, clearing out some of the clouds on how Argentina’s grief-sickened economy would likely to respond to its recent financial crux-run.

Aside from that, according to JP Morgan’s Emerging Market Bond Index Plus, Friday’s (September 20th) market had witnessed a 0.7 per cent upsurge of over the counter bonds, regaining almost all of its footings lost yesterday (September 19th), while risk spreads over US Treasury Paper, widely contemplated as a safe-haven asset, curbed 14 bps to settle down at 2,101.

Meanwhile, the Argentine currency, which shed more than 25 per cent so far following a landmark defeat of current President Mauricio Macri, a businessmen’s favourite, to his populist opposition which seemed to have cemented a likely victory for centre-left Fernandez on October 27th’s general election, wrapped up the day 0.16 per cent lower to 56.67 Peso against its American counterpart, posting a weekly plunge of 0.92 per cent.

Besides, expressing an overwhelming fret that the debt bill would unlikely to pass through Argentine Congress amid a sharp downward spiral on Mauricio Macri’s popularity, a head of local consultancy Estuidio Ber, Gustavo Ber said on Friday (September 20th), “The presentation of the debt bill increased expectations among investors, hence the positive reaction in the bond market despite the fact that they still do not know if they will have the necessary political support to implement the plan