EM LATAM CREDIT: Argentina Change in Reporting, Transaction Restrictions
Republic of Argentina (ARGENT; Caa3 pos /CCC /CCC+): Neutral Take
“Dollars in the mattress: The Government presents the "Historic Plan to Repair Argentine Savings" “ – BBG
• About 24 years ago Argentina had a banking crisis affectionately known as the “corralito” which prohibited depositors from withdrawing their money and a year later when the ban was lifted, all withdrawals were made in devaluated pesos even if the original deposit was made in dollars.
• That is one main reason why people literally store their savings in the mattress in Argentina or somewhere else outside the Argentina banking system. It is also why it will likely take a long time for skeptical Argentines to return their savings to the banking system.
• The government wants those dollars, by some reported estimates over USD200bn, to return to being used in the economy and banking system.
• Capital controls have made it necessary to have many burdensome reporting requirements and transaction restrictions but now with the lifting of most capital controls the government has lifted many reporting restrictions.
• For now, the government goal is to streamline the reporting of financial transactions, reduce bureaucracy and increase electronic transactions that can be tracked more easily.
• The government has been careful to consult entities such as the FATF (Financial Action Task Force) to prevent the country from being on gray or blacklists of countries with low tax control standards, according to an Argentina tax expert sourced by news outlet Infobae.
• Reporting personal purchases with credit or debit cards or virtual wallets will no longer be necessary.
• Banks will no longer be required to collect national income tax returns as part of operating with clients and the minimum thresholds for banks to report transfers, credits and cash withdrawals were raised.
• Various other reporting restrictions were lifted. Please see the article link for more details: https://www.infobae.com/economia/2025/05/22/dolares-en-el-colchon-el-gobierno-presenta-el-plan-de-reparacion-historica-de-los-ahorros-de-los-argentinos/
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EURJPY TECHS: Trend Signals Remain Bullish
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger
- PRICE: 161.63 @ 16:19 GMT Apr 22
- SUP 1: 161.18/158.30 50-day EMA / Low Apr 7 and key support
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
The recent pullback in EURJPY appears corrective - for now - and trend conditions remain bullish. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a resumption of gains would expose 164.19, the Mar 18 high and the bull trigger. Clearance of this hurdle would resume the uptrend.
COMMODITIES: Crude Gains, Gold Pulls Back From Record High
- Oil prices are higher today after the US imposed sanctions on Iran’s LPG trade, reversing most of yesterday’s losses amid demand concerns due to tariffs and US monetary policy.
- Comments by Trump about his call with Netanyahu and Bessent’s comments on China were late drivers of the rally.
- WTI Jun 25 is up by 1.9% at $64.3/bbl.
- A bearish theme in WTI futures remains intact and the recovery since Apr 9 is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind.
- Initial firm resistance is seen at $64.49, the Mar 5 low and a recent breakout level.
- Meanwhile, gold has pulled back from a fresh record high reached earlier in the session, with the yellow metal currently 1.4% lower today at $3,377/oz.
- Gold remains 8% higher MTD, amid ongoing haven demand, and it traded briefly at the $3,500 level earlier today, before traders took profit.
- The trend needle in gold continues to point north, with initial resistance at today’s intra-day high, followed by $3,547.9, a Fibonacci projection.
- Elsewhere, copper has rallied by 2.2% today to $489/lb, amid optimism of a de-escalation in US-China trade tensions. However, gains were pared after US Treasury Secretary Bessent said that negotiations with China will be a slog.
- For copper futures, the latest recovery, although strong, appears corrective - for now. However, price pierced $490.27, a Fibonacci retracement today, and a clear break would open $521.30, the Mar 28 high.
US STOCKS: Late Equities Roundup: Stock Bounce Tested By Headline Risk
- Stocks look to finish higher Tuesday, off highs as headline risk continue to hamper sentiment. Stocks surged back to late Friday levels briefly after headlines that Tsy Sec Bessent (speaking at a JP Morgan event in DC - closed to public and media) sees the China tariff standoff as unsustainable and expects a de-escalation to occur.
- Sentiment cooled yet again after Tsy Sec Bessent China headlines clarified: trade negotiations will be a slog, that negotiations haven’t started but that a deal is possible, according to people who attended his session.
- Currently, the DJIA trades up 978.46 points (2.56%) at 39149.95 (vs. Monday's low of 37830.66), S&P E-Minis up 127 points (2.45%) at 5312 (Monday low of 5127.25), Nasdaq up 421.2 points (2.7%) at 16292.42 (Monday low of 15685.33).
- Consumer Discretionary and Financial sector shares led gainers in late trade, PulteGroup +8.14%, Caesars Entertainment +6.00%, Royal Caribbean Cruises +5.13%, Tesla +4.72% and CarMax +4.38% led gainers in the Discretionary sector.
- Financials were buoyed by Invesco +8.75%, Global Payments +5.14%, KKR & Co I+4.79%, W R Berkley +4.72% and Discover Financial Services +4.38%.
- On the flipside, defense stocks trade broadly weaker with Northrop Grumman-14.55%, RTX -9.85% while Huntington Ingalls Industries dipped -0.85%.
- Earnings after the close: Capital One Financial, Baker Hughes, Tesla, Manhattan Associates, EQT Corp, Steel Dynamics Inc, Intuitive Surgical Inc, Enphase Energy Inc and Range Resources Co.
