📊 Analysis suggests potential high returns from investing in Peso fixed-rate bonds (like T15E7) funded by selling dollars, even considering future dollar appreciation scenarios.
⚖️ The strategy’s success heavily depends on the stability of the current exchange rate policy; post-election changes represent a significant risk.
🌍 New regulations allowing foreign investors (with a 6-month minimum stay) could increase USD supply, potentially supporting the carry trade environment in the short term.
@ClaveBursatilTV:
“I’ll show you something very interesting also from Salvador Viteli, which is on his Twitter, which is this calculation: the Carry Trade, right? Perfect. And then I’m going to link it with a news item that came out a few minutes ago. This is a matrix that Salvador made where the calculation is: what do I do first? Sell dollar MEP at today’s price, 1233? What do I do second? Invest in any of the letters or fixed-rate bonds. And then, to close the carry trade, what do I do? Well, when the paper matures, I repurchase dollars, right? But at what price do I repurchase? And here there are several scenarios for the dollar price at the closing of that carry trade, which is with the maturity of that paper, right? 1150, 1200, 1250, and so on. It even puts an upper band as a hypothesis, which is the upper band of the moment when… maintaining 1% monthly… Can you lower it a bit, Tincho? Sorry, because the zoom… There it is, ready. There, I see it perfectly. Perfect, ready, thanks. Yes, and you notice that, for example, in the paper you mentioned, which is the longest one, the T15E7, you have profit in all scenarios. Because the best scenario, you earn 82% if the dollar… if it doesn’t go up at all, stays at 1150 forever, I see it difficult, really. But even if the dollar goes to the ceiling of the band at that time, you make a direct 20%, which divided over 2 years… in a year and a half… but let’s say it’s the worst possible scenario for that paper. Clear. Well, the only way to lose there is if the bands split and everything goes to hell, right? It’s not bad. That’s why… But you see, I prefer the E38 or the BB37. Well, but those are different things. But this is for the following purpose, and now I’m going to tie it to the news I told you about. The question is, because the carry trade here plays a role that isn’t just whether we, those of us here watching Boneros, invest in letters or not, but rather if… what do companies do? That is, for example, do importers pay cash, or do they start carry trading with pesos and get indebted with the parent company? Or the exporters, what do they do? Do they retain the harvest or the product, or to take advantage of the rate, as they did in 2024, do they liquidate quickly to have liquid pesos to place at the rate? So, whether there is or isn’t carry trade modifies the rules of the exchange market game quite strongly too. So, if there’s positive carry trade, it’s more likely that exporters liquidate and that importers don’t pay cash, thus not demanding dollars. So, this, what we can see here, the heat map where there’s more green-yellow color than red, yes, shows that with the long ones, yes, there are more probabilities of a successful carry trade if this program isn’t destroyed. If the dollar goes above the band, the central bank sells all the dollars from the fund to the market, and the dollar continues higher, like in 2018… well, all the letters lose, right? Which is what happened in 2018. But I don’t think one situation can be compared to the other, right? Clear. But well, there you also have to see, think that it’s much safer in the short term. Also, the market must foresee that with the IMF dollars inside and the harvest, due to a seasonal issue, it’s less likely that the dollar goes to the ceiling of the band. And it can also happen that this exchange model or policy is modified next year, post-elections. We don’t know; it’s part of the risk. It’s part of the risk… I’ll throw you a piece of data: the Central Bank just released a circular, kind of complicated, but what it says is this: it authorizes access to the MULC, to the dollar, for foreigners, i.e., non-resident investors, and sets a minimum period of 6 months for the capital to remain in the local account. So, you’re a foreigner, a fund from abroad, whatever, a guy, a woman, you open a brokerage account and you want to sell, you want to do carry trade, basically. That is, you want to invest in something in pesos, you want to switch to pesos, invest in pesos. So now they will be able to do it, but they will have to leave the money for at least 6 months; they can’t be there for a day and leave. So, I ask you, how many… what do you think there are more of? Foreigners trapped in pesos who want to leave, or foreigners who don’t have pesos and might be interested in investing in Argentina? No, clear. If the foreigner carry today is minimal, very… it’s far below the Macri era. Clear. There’s nobody, there are no foreigners, no international funds investing… No, very little, it’s minimal, really, it’s minimal. So there you have a lot, a lot of potential interested parties. Yes, that’s why I also think it seems to me that there are more potential investors who will want to invest in the Argentine rate or in anything that is only in pesos in the local market that you don’t get on Wall Street… not the ADRs, no, but bonds in pesos, basically, or the interest rate of the Treasury or the Central Bank or whichever you want… I think… Or buy a warehouse. Clear. Or buy a warehouse. Now they will be able to. Now they will be able to access here, sell, sell the dollars, invest in whatever they want, but they have to invest for at least 6 months, right? So that will probably pour more supply into the dollar from foreigners who come… they are the famous ‘Golondrinas’ [Swallows], right? The bad… the sadly famous ‘Golondrina’ capitals. But well, it’s a swallow that has to stay here for at least six months, right? Six months it has to stay, a season, Tincho, it has to stay.”
Watch the exact part of the video where @ClaveBursatilTV talks about Argentine Peso Carry Trade Strategy here:
Watch the video on YouTube
Read more articles analyzing the Argentine Peso Carry Trade Strategy at the following link. BLOG.
