EM LATAM CREDIT: Argentina Jan. CPI, (ARGENT; Caa3pos/CCC/CCC)
"ARGENTINA JAN. CONSUMER PRICES RISE 2.2% M/M; EST. +2.30%
"ARGENTINA JAN. CONSUMER PRICES RISE 84.5% Y/Y; EST. +84.70%" - BBG
Positive for Bonds
• After a breathtaking 60% gain from August to December 2024, ARGENT 2035s stabilized in a trading range of $65-69, last quoted $65.75. Argentina January CPI better than expected 2.2% m/m, 84.5% y/y versus last month 2.7% and 117.8%.
• Further improvement in inflation should help the country get a new IMF program as well as maintain a stable FX rate, improve confidence in the government’s policies, and allow the government to lower local rates which could stimulate demand to hold pesos.
• Ultimately it brings the government closer to lifting capital controls which would stimulate investment both foreign and domestic as well as allow the country access to the international debt market which would bolster reserves.