Country risk climbs to 524 basis points
Argentina's country risk indicator, compiled by JP Morgan, ended Friday at 524 basis points, up 9 points from the previous day and the highest reading since August 20, when it stood at 534 points. The 1.7% daily increase marked a new monthly peak. The move was driven in part by weak sovereign bond performance, which was hit by the U.S. Federal Reserve's decision on Wednesday to raise its benchmark interest rate by 0.25 points. The Fed's action, approved unanimously by the twelve members of the Federal Open Market Committee and led by Kevin Warsh, came after nine months without changes and marked the first increase since July 2023. The Fed cited elevated inflation, which reached 3.4% year-on-year in August, as a reason for the hike.[S1]
Bonds and stocks decline
Both Bonar and Global bonds closed lower, with losses reaching up to 1% for the AL35D. Argentine ADRs on Wall Street also ended broadly negative, with YPF the sole gainer, up 0.8%. The biggest declines were Central Puerto (-7%), Globant (-5.7%), and Banco Supervielle (-4.3%). In Buenos Aires, the Merval index fell 1.3% to 3,021,925.96 points, or US$1,904 when measured in dollars, a 0.9% drop. The local stock exchange saw IRSA (-3.1%), Supervielle (-3%), and Transportadora de Gas del Sur (-2.7%) lead losses, while Transener (+1.6%), YPF (+0.8%), and Transportadora de Gas del Norte (+0.2%) advanced.[S1]
