Tuesday, October 21, 2008

A trade for the brave: Buy Argentine bonds today

As Bloomberg reports, Argentine bonds are being dumped in wholesale style this morning, the move a continuation from yesterday's sell-off. Yields are now over 24% on the longer bonds. The Merval index is also 8% down this morning (so much for "TEO might be value here" call yesterday lunchtime, eh?").

However this might be a great buying opportunity for bonds, as most of the selling is being done by the very same AFJPs that are about to be left jobless. When Klishtina speaks at 4pm today to officially announce the move there may be further restrictions placed on the bonds market that's currently being heavily sold. So any type of Kirchner regime intervention in the bonds market is likely to send the paper higher on the rebound tomorrow. This proposed trade is only for the brave amongst you.