Summertime for financial markets

The beginning of the year is being better than expected for the Argentine economy: the exchange rate stands close to the lower bound of the intervention band and volatility remains at low levels, the Central Bank has already bought US$ 978 million and also managed to reduce the LELIQs interest rate by 1,500 bps, while country risk fell 147 bps and stands at 670 levels. Moreover, the external front in January was extraordinary: global equities markets grew strongly. As a result, most currencies appreciated and risk appetite returned. In addition, the Fed sent signals that it would stop hiking interest rates and moved to a dovish stance, keeping an eye on the evolution of economic activity. In this context, Argentine's stock market grew more than 20% m/m while local financial conditions showed its strongest increase in 6 years.