After the scandal over the government’s intervention in the inflation index published by Indec, postponing the methodological update on a discretionary basis “until inflation goes down” (Caputo dixit), “the markets” reacted negatively with falls in stocks and bonds and a rise in country risk, which once again broke the 500 point barrier.
In the bag Wall Streetthis Tuesday Argentine stocks registered drops of up to 33%as in the case of Bioceres. Technology followed them They are gloatingwith a collapse of 12,71%.
At the local level, the actions of Edenor They led the falls by falling 5.2%, followed by Sociedad Comercial del Plata (5%), Transportadora de Gas del Norte (-4.4%), Metrogas (-3.9%) and Telecom (-3.3%).
Likewise, the S&P Merval stock market index of Commerce of Buenos Aires fell 2.2%, going to an average red of 5% at the beginning of February, while public securities in dollars subtracted 0.6% on average.
For his part, the country risk index prepared by JP Morgan, grew 10 basis points to 503 points, after an intraday maximum of 506 and remaining at highest level since January 26.
Although some declines on Wall Street were related to the international context in which the technological index Nasdaq was sinking 1,8% Driven by a cooling of relations between Nvidia and OpenAI (Amazon and Microsoft also lost ground amid the continued sell-off in software stocks), the impact on Argentine stocks was exacerbated by the government’s self-generated local problems.
It is that the decision of Milei and Caputo to interfere with the publications of the Indec not only affects the workers in the parity negotiation (which will have a lagging and outdated index), to the retired (whose automatic salary adjustment is made based on monthly inflation) and to the entire working class, but also to their own: financial capital and its operators. This happens because the performance of many bonuses They are tied to the inflation rate.
Various estimates indicate that with the updated price index, inflation would have been 40 points higher since Milei took over. Likewise, the organism becomes disputedgenerating distrust towards its methodology and its adaptation to reality, since the government begins to guide publications according to your convenience, like in the times of Guillermo Moreno.
Caputo confessed that he will not update the methodology for calculating the inflation index as proposed by the technicians of the statistical agency, and the clarifications only obscure: “It is not methodologically serious to implement a new system in the middle of an ongoing process,” they detail from the ruling party, and add that they will not modify the index until it reaches 1% per month.
The problem is that far from disinflation, the price increase has warmed up again in recent months (2.5% in November and 2.8% in December, with the current index) and with the increase in rates, a continuation of these increases was expected. Bondholders, no matter how friendly they are with Caputo, will not hesitate to initiate an avalanche of lawsuits over bonds that adjust for inflation, a scenario similar to the one that occurred when Guillermo Moreno intervened in the price index.
Nor will this intervention be well received by international organizations, which have been demanding an update. Thus, the Government is weakened, while its only support is financing from Donald Trumpwhich already faces its own problems.
Source: www.laizquierdadiario.com
