Argentine bonds rally, risk index nears 400 amid inflation data

Argentine assets rallied this week following the release of June inflation data, bringing the country risk index close to the 400-point level. The JP Morgan risk index fell to 405 points, its lowest since 2018, while sovereign dollar bonds rose up to 0.5% Source: Clarin. However, reports from other outlets showed mixed signals, with Infobae noting the index rose to 405 points on some days and 411 points later in the week, reflecting market volatility Source: Infobae.

Market movements

Equities showed divergent trends. The Merval index edged up 0.8% in dollar terms on one trading day Source: Clarin, while another session saw a 1.4% drop in pesos as global risk aversion hit local stocks Source: Infobae. Energy stocks like YPF gained 3.7% on higher oil prices, while banks fell up to 5% Source: Infobae. The blue-chip swap rate (CCL) remained stable at 1,568 pesos, and the central bank bought a record USD 280 million in a single day Source: Infobae.

Global context and outlook

Investors also reacted to US inflation data, which showed a surprise 0.4% monthly deflation in June, boosting Wall Street Source: Infobae. Rising geopolitical tensions in the Middle East and a US blockade of the Strait of Hormuz pushed oil prices higher, benefiting Argentine energy exporters but raising inflation concerns Source: Infobae. Domestically, the Treasury launched a new dollar-linked bond (AO29) to manage upcoming maturities Source: Infobae. Analysts expect earnings reports and potential IPOs from Genneia and YPF Luz to further test investor appetite for Argentine risk Source: Clarin.