Welcome Avatar! August was a bit of a strange month. Inflation hit its lowest level of the year, reserves reached a record high, the peso remained stagnant, and yet the real economy plummeted. Then, the government shifted the focus to the Malvinas, which is where the core of this issue lies.
The September issue of the Macro Pulse, covering August, in three words: records and cracks.
Here is what is covered inside:
Inflation: August saw the lowest MoM print of the year with 1.7%, but data suggests the floor lies within this range, not so much below.
Peso, Reserves, and rates: a stable exchange rate, and record reserve levels during those same four weeks, alongside a rebound in rates.
Country risk & Credit: remains at 500 points despite a global sell-off of bonds; the credit cycle is shifting, with household delinquency at 12.8% and continued deterioration in personal loans.
Economic Activity: industrial output fell 5% MoM (twelve of sixteen sectors in negative territory) contrasted against record oil production and a modest yet real surplus; a two-speed economy ahead of the budget.
The Malvinas dossier: what Milei announced, and why Cristina’s 2013 sanctions were a “paper tiger” in comparison. We go over how Vaca Muerta changes the outlook in combination with the Ushuaia base, and what London’s “relentless” response forgot to mention.
The Ticker: why this month’s ticker is a bank, and which one.
My analysis and the updated list of indicators to watch through the end of September.
Vamos.