North American shares rose 3% since the start of trading on Tuesday, but in the afternoon trimmed profits when investors continued to evaluate the number of new cases of coronavirus in the USA and the responses of policy makers to the outbreak.
The state of New York, which is home to the largest number of cases in the US, reported its highest one-day increase in new cases of coronavirus in 731 infected, with a total of 5,489. This marked a jump after two previous days of flat numbers and fewer daily deaths, to 599 deaths on Monday and 594 on Sunday.
By cutting off Wall Street’s bullish push, negative fundamentals were imposed for Argentine stocks and bonds for the weakness of the domestic economy.
With a low credit rating for Argentina, still in an unresolved process of restructuring of sovereign debt, the Risk country, which came to operate below 3,600 points in the morning, jumped more than 150 units, to overcome again the 3,700 basis pointsIt should be remembered that the indicator came to position itself above 4,500 integers intraday on Monday, March 23.
The domestic scene offers many more shadows than lights, after Sunday night the Government established by decree the reprofiling of dollar bond maturities under Argentine law until 2021.
Prices remain balanced for bonds issued under foreign law, whose treatment by the Government of Alberto Fernández still unknown.
“Although what happened was against the undifferentiated treatment expected, the rise in these bonds reflects that the market does not consider the re-profiling of local debt as a threat to the restructuring of foreign law“They referred from Investments Personal Portfolio.
A report from Research for Traders He said that the recovery of the titles governed by foreign law was due “to the fact that the strategy seems to be buy time for a better deal with bondholders holding debt issued under international law, respecting the payment of interest. ”
In that framework, Fitch Ratings downgraded the foreign currency credit rating from Argentina to “Restricted Default” from “CC”, after the delay of payments of the debt in dollars under local law by the Government.
The “Restrictive Default” is located only one notch above “Default” statuswhile “CC” represents very high levels of credit risk.
Already on Friday, April 3, Moody’s Investors Service had lowered the Argentine credit rating, with a negative outlook, after the coronavirus pandemic It disrupted talks about debt restructuring with creditors and raised the likelihood of a “default.”
In that line, the Buenos Aires province announced that he will seek reduce principal and long-term coupons of its debt to be restructured, which totals USD 7,148 million, according to a guideline for the “sustainability of public debt” uploaded to the website of the provincial Ministry of Finance.
The governing district Áxel Kicillof, former Minister of Economy of the government of Cristina Kirchner, also highlighted the need to “reach a consensus magnitude grace period enough”.
“Our fiscal position is extremely fragile and it is necessary to prioritize the allocation of our resources to attend to the most critical situations at a social level, ”said the province, referring to the economic effects of the coronavirus pandemic.