Argentina Bonds Slump as Growth Sputters

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Argentina Bonds Slump as Growth Sputters

MERVAL2,848,945.00-0.35%

USD/ARS1,525.50+0.05%

EUR/ARS1,715.20+0.20%

Gold4,098.30-1.25%

Market Snapshot

Asset	Level	Change
MERVAL	2,848,945.00	-0.35%
USD/ARS	1,525.50	+0.05%
EUR/ARS	1,715.20	+0.20%
Gold	4,098.30	-1.25%
Brent Crude	112.49	+3.37%
Soybean	1,258.00	+1.02%
Bitcoin	81,645.04	-2.82%
Argentina 10Y	-	-

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
No events available

Mild August rebound follows sharp July contraction
MERVAL slips 0.35% while bonds extend selloff
USD/ARS edges up 0.05% as peso holds steady

Yesterday's Recap

Argentina's economy posted a mild recovery in August after a steeper contraction in July, leaving growth on a sputtering path through the second half of the year. The MERVAL index declined 0.35% to 2,848,945 amid a broader rout in local bonds that caught bullish investors off guard. The USD/ARS rate rose 0.05% to 1,525.50 while the EUR/ARS pair advanced 0.20% to 1,715.20, reflecting contained peso pressure.

Soybean prices climbed 1.02% to 1,258.00, supporting export revenues, yet Brent crude's 3.37% jump to 112.49 added to imported inflation risks. Bitcoin's 2.82% drop to 81,645.04 offered little offset for risk sentiment. The Argentina 10-year bond segment showed no quoted change, underscoring thin trading and ongoing caution ahead of political developments.

The Day Ahead

With an empty domestic calendar, attention turns to soybean export flows and any fresh signals on fiscal consolidation under the IMF programme. Traders will monitor peso liquidity and any BCRA interventions that could influence USD/ARS stability near 1,525.50. Global oil strength at 112.49 may feed into next month's inflation prints and keep pressure on real wages.

Investors also await updates on debt-market sentiment following the recent bond selloff. Any remarks from officials on spending restraint or reserve accumulation could shift short-term positioning.

Other Economic Notes

Fiscal consolidation remains central to restoring credibility with multilateral lenders and domestic holders of peso assets. Soybean export proceeds continue to anchor hard-currency inflows, yet volatile global commodity prices add uncertainty to the trade balance. The 33.5% August CPI reading highlights persistent price pressures that complicate efforts to rebuild reserves without renewed currency stress.

Markets remain sensitive to any perceived slippage in primary-balance targets, which could reignite depreciation expectations. Sustained high inflation also limits room for growth-oriented policy adjustments in the near term.

Global Macro News

A renewed selloff in French bonds and oil's surge above 112 added to global risk aversion that spilled into emerging-market assets, including Argentina. ↓ p.2

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Global Macro News (continued)

The Philippine central bank's surprise 50 bp hike to 5.50% underscored how inflation and currency weakness are prompting tighter policy across Asia, a dynamic that can lift external borrowing costs for Argentina. Australian officials flagged a worse inflation outlook, reducing expectations for near-term easing and supporting higher global yields. Indonesia's central bank held its main rate steady while adjusting deposit facilities, illustrating varied approaches to capital-flow pressures.

Broader equity weakness, including declines in AI-related names, reinforced the flight to safety that pressured Argentine bonds. These cross-currents compound domestic concerns over upcoming political events and limit appetite for local duration.

BCRA Watch

The BCRA has provided no fresh forward guidance in recent days, leaving markets to interpret the 33.5% August inflation print as justification for continued restraint. Officials have reiterated the priority of reserve accumulation and exchange-rate stability without specifying timing for any adjustment in the policy stance. The absence of new communications keeps focus on operational signals such as daily interventions and liquidity management aimed at containing peso volatility.

Market participants view the current framework as consistent with supporting the IMF programme, yet they remain alert for any shift in rhetoric that could alter expectations for future moves. Without explicit signals, the committee's actions will likely stay data-dependent and tied to fiscal progress.

Argentina Macro Daily(Beta Mode)