Argentina's country risk nears 400 points amid positive economic signals

Argentina's country risk index has retreated, nearing the 400-point mark, buoyed by a favorable international climate and encouraging domestic macroeconomic data. The indicator, compiled by JP Morgan, shed six units to settle at 404 basis points, moving away from the 410 points recorded previously and approaching its lowest level since the current administration took office.

This compression in the country risk is attributed to the performance of sovereign bonds. Local law bonds experienced increases, with some Global bonds also rising. Analysts suggest that if international markets remain supportive, the country risk could potentially fall below 400 points.

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With all of that, it is expected that the country risk will compress.

Fernando Marull, a partner at FMyA, noted that the international context, despite ongoing Middle East conflict and potential interest rate hikes by the U.S. Federal Reserve, is currently favorable for emerging markets. He indicated that calmer U.S. Treasury yields are increasing appetite for Argentine debt.

Simultaneously, Argentine stocks traded in New York (ADRs) registered gains, mirroring the performance of major Wall Street indices. Financial stocks, including Banco Supervielle, Banco Macro, and Grupo Financiero Galicia, were among the top performers. The Buenos Aires Stock Exchange also trended upward, with the Merval index adding 1.9%.

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If the international market accompanies, the country risk can break through 400 points.