Friday, December 3

The economic agenda of the week: the market reaction and other keys


Tuesday

On Tuesday 16 the central bank will publish its quarterly report on monetary policy IPOM. This quarterly publication aims to analyze the national and international economic situation, evaluate inflationary dynamics and its prospects, and explain in a transparent way the reasons for monetary policy decisions. This week, the agency sold about $ 640 million in the last 10 business days before today’s legislative elections.

In the comparison, they are almost six times less than the US $ 3,645 million it had to disburse to satisfy the demand of the foreign exchange market in the same period prior to the 2019 presidential elections. In the two weeks prior to the 2015 presidential ballot , the Central Bank had to sell some US $ 1,221 million to supply the demand of importing companies and banks in the Single Free Exchange Market (MULC). Despite this, the monetary authority sold about US $ 290 million in the market on Friday, the highest level since the inauguration of Alberto Fernández’s government.

Wednesday

On Wednesday 17 will be known the use of the installed capacity in the industry for September. In August 2021, the use of installed capacity in the industry stood at 64.4%, a level higher than the same month in 2020, when it was 58.4%. With respect to the same month of 2021, the main positive impacts were observed in basic metal industries and in metalworking except automobiles.

On the same day, INDEC will also release data on the consumption of public services for August.

Thursday

On Thursday 18 the Finance Secretary will carry out the second monthly bidding for securities in pesos. The result of the first tender of the month was positive for the government: the Ministry of Economy obtained $ 79,585 million in the first tender of the month, almost seven times more than the maturities of the week ($ 11.6 billion). Additionally, it managed to exchange 52% of the remainder for the dollar linked T2V1 bond, which expires on November 30. After the General Elections, the ministry will aim to try to redouble the bet.

On the same day, INDEC will also release wholesale prices and construction costs for October. Regarding wholesale prices, which is almost always in line with the CPI released the previous week, the month of September saw an increase of 2.8% in September compared to the previous month, registering a year-on-year increase of 59.1%. According to the previous INDEC report, this increase was due to the rise in domestic products (2.8%) and in imported products (3.3%). In turn, primary products (3.4%) and manufactured products (2.6%) advanced, while electrical energy fell 0.4%.

The challenges ahead

With the new conformation of Congress, the ruling party will promote the approval of the Budget 2022. With the result, the talks would be resumed on Tuesday through preliminary meetings before Martín Guzmán must defend the project in Congress.

In addition to the Budget, Guzmán’s economic agenda will continue with a series of bills that await treatment such as the promotion of hydrocarbon investments, some projects related to the agro-industry and the automobile industry. Looking ahead to next year, the Ministry of Economy will seek to advance in the negotiations with the International Monetary Fund (IMF).



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