Nearly all of the gains that markets had made so far this month were lost, especially in the last week of February. The retail dollar rose by 10 pesos to 1,435 pesos, marking four consecutive increases. Meanwhile, the JP Morgan indicator, which measures the sovereign debt risk premium, climbed by 4%, reaching 576 basis points. This erased all the improvement it had accumulated throughout the year, according to the Argentine News Agency. The indicator is being driven down by falling bond prices, which dropped by 1% in this session and appear disconnected from the political and financial achievements the government secured this week. Between Wednesday and Thursday, the government issued dollar-denominated bonds for $250 million, providing funding to refinance debt and showing the market's appetite for such securities, which opens the door for future issuances of this kind. This comes as the government won key votes in Congress on two major bills: changes to the glaciers law and the agreement with the European Union, and is one step away from the Senate granting final approval to the labor reform. The country risk premium, however, moves away from this optimism, partly undermined by a poor performance in global markets, which retreated this week due to fears of a bubble in artificial intelligence and tech companies. Locally, despite the government's efforts to rebuild Central Bank reserves, the weakness of economic activity sows doubts about the room the team led by Javier Milei has to continue applying austerity policies and maintaining import openness with a dollar perceived as 'cheap'. The country risk premium, which had fallen below the 500-point mark at the end of January, is on the rise again. This change in trend pushes Argentina further from a return to global debt markets and suggests that Caputo will continue the path they began this week of funding themselves in hard currency in the local market. The rise in the dollar is linked to the fall in peso interest rates, which has been recorded this week and seems to be putting a brake on the carry trade strategy that had been dominant throughout the summer. Despite the shift in the dollar's trend, the Central Bank remains firm in its buying streak, which has not been interrupted in a single session since January 5 and has already allowed it to accumulate more than $2.7 billion.
