Argentine Bonds Higher, Peso Weakens Ahead of US Jobs Data
07/05/2012| 05:19pm US/Eastern
By Ken Parks
BUENOS AIRES--Argentina's benchmark bonds rose and the peso closed slightly weaker on robust volume Thursday, ahead of Friday's key U.S. jobs report, which is expected to set the tone for trading in the days ahead.
"We'll have to see the unemployment numbers in the U.S. tomorrow, which is going to determine" the direction of Friday's session, Bull Market Brokers senior analyst Juan Jose Vasquez said.
"[Local bonds] are still at very beaten-down levels," he said, adding that many bonds sport yields that don't appear to be justified by downside risks.
Argentina's dollar-denominated sovereign bonds have rallied in recent weeks after President Cristina Kirchner repeatedly assured investors payments will be honored in dollars.
Turnover on the local fixed-income market was 740.8 million pesos ($163.6 million), accounting for about 74% of the total volume of securities traded on the exchange during the session.
The Bonar X closed 0.8% higher in price terms at ARS480.00, yielding 6.01%.
The dollar Par 2038 bond rose 0.4% to ARS226.00, yielding 8.56%.
The Boden 2015 rose 0.6% to ARS528.00, yielding 2.26%.
The 2035 peso-denominated GDP warrant closed 0.4% higher at ARS11.77, and dollar GDP warrants fell 0.3% to ARS66.10.
The peso weakened to close at ARS4.5295 to the U.S. dollar on the MAE foreign-exchange wholesale market, compared with ARS4.5265 Wednesday.
The central bank regularly intervenes in the foreign-exchange market, buying dollars to build its international reserves and keeping the peso on a slow path of depreciation against the U.S. currency to help exporters.
Puente said in a note to clients that $438 million changed hands on the local spot market, with the central bank buying about $130 million.
"In this context, there don't appear to be important changes [in the exchange rate] in the short term. The exchange rate appears to be stuck at these levels," Puente strategists wrote.
Argentina's benchmark Merval stock index closed 1.9% lower at 2381.00 on volume of ARS68.1 million.
Financial issues sported the heaviest losses, after the central bank published a new rule requiring private-sector banks to earmark about 5% of their deposits for commercial and small business loans.
Banco Macro SA (BMA, BMA.BA) fell 7.3% to ARS8.24, Grupo Financiero Galicia SA (GGAL, GGAL.BA) closed 5.5% lower at ARS2.94, and BBVA Banco Frances SA (BFR, FRAN.BA) fell 5% to ARS7.55.
Steelmaker Siderar SAIC (ERAR.BA) fell 1.2% to ARS1.72, steel tube maker Tenaris SA (TS, TS.BA) lost 0.5% to close at ARS116.40, and phone company Telecom Argentina SA (TEO, TECO2.BA) fell 2.2% to ARS15.70.
Among gaining issue, electric utility holding company Pampa Energia SA (PAM, PAMP.BA) closed 4.6% higher at ARS1.15.
Write to Ken Parks at firstname.lastname@example.org