Best Financial Markets Analysis Article After nearly a decade of depression, recession and resurrection, Argentina wants to retire its remaining unpaid debt at about 50 cents on the dollar and rejoin world financial markets.

It all goes well, Argentine debt and the peso could be a very good investment.

Chart 1 ARG CDS The cost of insuring debt is stable just above pre 2008 crash levels and the peso is forming a bottom around 25 US cents.

Chart 2 ARG RESERVES stable around 45-50B USD

Chart 3 Dollar bonds due 2033 are yielding 11% and poised to break out

Chart 4 ARS INDU The last time world equity markets were at current levels, the peso was 25% more expensive.

Assuming the weak peso policy has stabilized the currency around 25 US cents, interest differential gains of 10-20% can be realized by purchasing six to twelve month peso forwards. Forwards have no exposure to bond risk. Any peso appreciation would be a windfall.

By Daniel Bruno
Chartered Market Technician

www.FXboss.info

FXBOSS receives 24-hour streaming news and expert commentary. Over 70 FXBOSS forex specialists talk to trading rooms in the world’s currency capitals and track major political, economic and market events globally. They give you the instant, live, tradable information you need to judge the direction of the market, and make informed decisions about your trades.

© 2010 Copyright Daniel Bruno - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Comments

PJ
26 Apr 10, 13:34

your joking, right?

Do you really think anyone in their right mind is going to buy Argentine debt? Especially when you have insane Peronistas stealing peoples pension money and deposits in the central bank? Argentina’s economic slogan since the early 20th century has been” overspend and collapse again”. Sovereign debt is a black hole investment and Argentina is one of the worst offenders.

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