EM LATAM CREDIT: Republic of Argentina (ARGENT; Caa3pos/CCC/CCC): Update
“The free dollar reaches $1,300 for the first time since September” – Infobae
Negative for prices
• Reports of exporters withholding USD sales expecting a further devaluation as well as market participants concerned about an IMF deal that might contain FX regime change.
• ARGENT 2035 bonds were last quoted USD64, down in price from USD67 at 2024-year end and after hitting a five year high of USD69.25 in early January 2025.
• The government is offering two short term maturity bonds denominated in USD tomorrow to send a signal to the market that it doesn’t have plans to devalue the FX.
• A devalued FX could result in higher inflation and that is something the IMF nor the government likely wants so we think any FX regime change would get phased in gradually, be limited in nature and might not even take effect until next year when the government said it planned to lift capital controls.
• Loss of reserves has been a cause for concern as the government has increased sales of USD recently to support the ARS as well as used USD that it bought in the market in the past year to repay debt principal and interest payments.
• International reserves according to the BCRA were USD29.6bn at year end 2024, USD28.3bn Jan. 2025, USD28.1bn Feb. 2025 and as of yesterday USD26.4bn.
• IMF technical staff briefed the Executive Board yesterday and the Board is now seeking international support from the G-7 and China according to Infobae.
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Historical bullets
USDJPY TECHS: Bears Remain In The Driver’s Seat
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.70 50-day EMA
- RES 2: 152.62 20-day EMA
- RES 1: 150.74 High Feb 21
- PRICE: 149.21 @ 15:56 GMT Feb 24
- SUP 1: 148.85 Low Feb 24
- SUP 2: 148.65 Low Dec 3 ‘24 and a key support
- SUP 3: 148.01 Low Oct 9 ‘24
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears remain in the driver’s seat and the pair again traded to a fresh short-term cycle low. The move down has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.62, the 20-day EMA.
USDJPY TECHS: Bears Remain In The Driver’s Seat
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.70 50-day EMA
- RES 2: 152.62 20-day EMA
- RES 1: 150.74 High Feb 21
- PRICE: 149.21 @ 15:56 GMT Feb 24
- SUP 1: 148.85 Low Feb 24
- SUP 2: 148.65 Low Dec 3 ‘24 and a key support
- SUP 3: 148.01 Low Oct 9 ‘24
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears remain in the driver’s seat and the pair again traded to a fresh short-term cycle low. The move down has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.62, the 20-day EMA.
US: Polls Hint At Inflation Risk To Trump, Consumer Sentiment Dips
A Reuters/Ipsos poll released Sunday underscored that President Donald Trump is putting “considerable effort into policies that many Americans don't like, or don't consider very important... Fighting inflation motivates 58 percent of the survey’s respondents. Just 32 percent approve of Trump's performance on prices… Fifty-three percent of the country opposes what they see from Trump’s Department of Government Efficiency, while 42 percent of the country supports the endeavor.”
- The Hill notes on the Ipsos survey, “President Trump is flying high… but polls at his one-month mark are flashing yellow,” noting that Trump "has acknowledged higher inflation but tried to sidestep the topic last week during a Fox News interview. Both the president and Vice President JD Vance have said lowering grocery prices will take time."
- The University of Michigan notes: “Consumer sentiment extended its early month decline, sliding nearly 10% from January. The decrease was unanimous across groups by age, income, and wealth. All five index components deteriorated this month, led by a 19% plunge in buying conditions for durables, in large part due to fears that tariff-induced price increases are imminent.”
Figure 1: Consumer Sentiment, Monthly and Three-Month Moving Average
Source: University of Michigan
