Argentina’s presidential election as a summary of the “pre-election” the most votes of the opposition leader hit the markets, the currency depreciated 30 percent against the dollar, the stock market fell 10 percent.
In the preliminary elections seen as a summary of the presidential elections in Argentina, the opposition leader Alberto Fernandez received more votes than expected against President Mauricio Macri, which caused concerns for investors who have already reduced his position in Argentine assets.
Hard currency sales were experienced in currency pesos and treasury bonds. The peso was traded at 65 levels, losing nearly 30 percent against the dollar at the opening. Merval Index also fell more than 10 percent. Brazilian and Chilean currencies declined along with the peso.
The country’s Euro-denominated bonds with a maturity of 2028 increased by more than 1 percent to 11.89 percent. Amherst Pierpoint Securities issued a panic warning before the opening of the markets, while other institutions may intervene to support the Central Bank’s currency.
Carolina Gialdi, a strategist at BTG in Buenos Aires, commented, “This is very negative for the markets. Markets will price this development as Fernandez won.”
Bonds and stock markets were up on Friday, expecting Macri to win preliminary elections. Traders are worried that Macri will move away from the market-friendly approach and the country will return to policies such as capital controls.
Siobhan Morden of Amherst Pierpoint Securities said in a statement on the subject, “The only thing to do is to expect Fernandez to be moderate.
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