Argentina

The risk of a Cristina Fernández de Kirchner winning the presidential election in Argentina has spooked investors, causing the currency to sell off and bond prices to slump. But the weakening economy is bolstering support for president Mauricio Macri’s rivals, causing what investors are calling a “toxic feedback loop”.

A coup attempt in Venezuela has rekindled hopes among investors that president Nicolás Maduro will cede control to the opposition regime. The development drew the spotlight away from Argentina’s spiralling currency.

Argentina’s central bank has abandoned its promise to allow the peso to trade freely within a range and has received approval from the IMF to use its foreign currency reserves to intervene.

Argentina and Turkey are firmly established as volatile names in emerging market credit. Both sovereigns have political and economic issues that place them in the highly vulnerable bracket.

Battling a host of problems — local and global — Latin American bond markets suffered a torrid 2018. Many issuers stayed away, high yielders struggled to find financing and investors booked losses. With more volatility expected, political developments in LatAm’s three largest economies could make or break the region’s bond markets in 2019. Oliver West reports.

In this round-up, Trump was confident China would deliver on promises from G20 dinner, China signed several cooperation agreements in Panama and Argentina, China Financial Futures Exchange (CFFEX) planned to lift bans on trading stock-index futures to boost market activity.

Some Latin American DCM bankers think the year is over for new issuance, and several are indeed wishing it already were. Although much of what put the brakes on in Lat Am this year will continue to affect the market in 2019, bond bankers should find reasons to believe January will be better.

Turkish and Argentine assets have been battered over the past few months, but one investor believes that both countries can provide good value and is expanding its exposure.

Yields on Argentina’s dollar-denominated debt hit their tightest levels since early August on Thursday after the IMF increased the size of its financing package from $50bn to $57.1bn.

The IMF and Argentina’s announcement of a new improved financing package came after markets closed on Wednesday, but bond investors say it can be positive for the country's sovereign bonds.

Argentina’s bond rally may not have much further to run even if the country does clinch a larger deal with the IMF, as investors turn their focus to president Mauricio Macri’s challenge in retaining popularity.

Argentine state-owned oil and gas company YPF said on Tuesday that it would buy back $176.245m of the $452.198m in dollar bonds it is due to repay on December 19.