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What to cover yourself with, according to the market?

February 9, 2024 – 09:48

Speaking of the dollar, Neix analysts outlined two alternatives for Dollar Linked hedging: Hedging the official dollar became significantly cheaper in the short leg.

Dollar, inflation or bonds: what to hedge with, according to the market?


Speaking of dollarNeix analysts outlined two alternatives for coverage Dollar Linked: the coverage to official dollar It became significantly cheaper in the short section. The Treasury bond linked to the dollar “TV24” yields 8% against a synthetic Rofex which is barely positive. So, an alternative is to take advantage of the drop in short-term CER debt and buy “TX24” or “T3X4” (Treasury Bond in pesos with CER) offsetting it with Rofex.

“Even in a scenario where average monthly inflation drops to 14% per month between February and April, the “T3X4” can be an indirect hedge of the official dollar. Above that average the CER debt continues to be better. However, given that these strategists prefer a slightly longer curve term for inflation-adjustable bonds (TX26) for an investment of up to 90 days, “TV24” is a good instrument.

What happens between the “TDA24” (Dual Bonus) and “TV24”?: the premium for the TDA24 versus the TV24 is relatively expensive in relation to the inflation projections that can be made. Finally, according to the recent Staff Report of the IMFthere is a commitment to stop issuing debt adjusted by the official exchange rate, therefore these products (dollar linked and dual) would begin to become scarcer, so also considering this, the “TV24” can be a good vehicle short term, they stand out.

In relation to the Fund’s Staff Report regarding the fact that the BCRA’s financing goal for the Treasury in 2024 will be null, the novelty is the fine print, pointed out an old wolf of the market who explained that now this financing will be measured taking into account not only the transfers of Transitory Advances (ATN) and the Transfers of Profits, but also other concepts such as Non-Transferable Bills, the BCRA purchases of securities in pesos in the secondary market, the exercises of puts and, netting all that, the Treasury repurchases of sovereigns in the hands of the BCRA.

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