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Argentina to default on its external debt

Maio 22, 2020

Argentina extended the deadline on its debt offer to June 2 from May 22 while negotiations with creditors continue

Talk of the Day
 

Argentina

The government is unlikely to pay coupons on three bonds under foreign legislation today (payments were due on April 22, but there was a 30-day grace period). As a result, bondholders will be entitled - under certain majority conditions - to request the acceleration of principal repayment and initiate litigations. Argentina extended the deadline on its debt offer to June 2 from May 22 while negotiations with creditors continue.

Brazil

COVID-19 update: the latest official information from the Ministry of Health is that Brazil has 310,087 confirmed cases (up by 18,508 vs 19,951 from the day before), with 20,047 confirmed deaths (up by 1,188 vs 888 from the day before), which implies a 6.5% mortality rate. There are now 125,960 recovered cases (up by 9,277 vs 9,889). The ICU occupation is still high: in São Paulo, for instance, the rate of beds for COVID-19 patients now stands at 90% in the capital (from 88%) and 73% in the state (from 72%).

Due to the anticipated holiday in the city of São Paulo yesterday, our Daily Activity Index was not published. The report will resume today.

Mexico

Day Ahead: The statistics institute (INEGI) will announce March’s retail sales at 9:30 AM (SP time), which we expect to slow down to 0.4% yoy (from 2.4% in February). We expect the deterioration in labor market indicators due to COVID-19 to weigh on private consumption, despite lower inflation and a temporary recovery in remittances in March.

Chile

Day Ahead: The minutes of the May monetary policy meeting will be published. The minutes will likely build on the message of the necessity for significant monetary stimulus to aid the economic recovery ahead, consolidating the signal low-for-long rates. Additionally, it will also likely reiterate the preparedness to respond through boosting QE tools if risks for the economy increase even further.



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