Bottom fishing? After the US injects capital into Argentina, Citi turns bullish on the country's "BONTE 30" bonds

```

After the U.S. Treasury intervened to support the Argentine peso, Wall Street's attitude toward the South American country’s assets is quietly shifting.

On Thursday, October 9, Citigroup stated in a client report that it would take a long position on Argentina’s BONTE 30 bonds, believing that external support has provided local assets with room to rebound before crucial elections.

Analyst Ivan Riveros said the market’s rebound is based not just on expectations of possible future announcements, but rather on the news that the U.S. Treasury has already begun intervention. The bank believes that this intervention has created conditions for Argentine local assets to continue “releasing risk” before the October elections.

Although the outlook has improved, Citi also emphasized that the upcoming midterm elections on October 26 remain a significant risk facing the market. Until the election results are clear, this political event will continue to keep the local market in a fragile state, and will place a potential cap on investor optimism.

Focus on BONTE 30 Bonds

The report clearly indicates that the U.S. Treasury’s intervention is the main source of market confidence. This move is seen as a key external force stabilizing the Argentine currency, thus reducing some exchange rate risks faced by investors holding assets in the country. Ivan Riveros wrote in the report that the market’s positive response proves that investors have reacted to the actual intervention.

The specific target of the bank’s wager this time is Argentina's BONTE 30 bonds. According to the report, these are 30-month notes. The unique feature of the bond is that while it is denominated in Argentine pesos, it must be subscribed in U.S. dollars.

For investors seeking to invest in Argentina while hedging part of the local currency volatility, such instruments have certain appeal.

Recently, due to Argentine President Milei's party suffering an unexpected defeat in the Buenos Aires provincial elections, investor confidence in the Milei administration was shaken, sparking a wave of selling in the Argentine peso.

Previously, WallstreetCN wrote that, to defend the exchange rate, Argentina’s central bank sold over $1 billion in foreign exchange reserves within three days. The peso/dollar onshore exchange rate also once dropped by more than 30% within the year.

The US "Injects" $20 Billion into Argentina

WallstreetCN reported that on October 9, U.S. Treasury Secretary Bessent disclosed on social media that the U.S. Treasury had directly purchased Argentine pesos in the spot market. He said this move was to “act quickly” in support of Argentine President Milei’s ongoing economic reform agenda.

Bessent also announced that a $20 billion currency swap framework between the U.S. and Argentina's central bank had been finalized. This series of actions clearly shows that the White House is mobilizing funds to support its political ally, with Bessent labeling Milei’s reform agenda as “systemically important.”

Boosted by this news, Argentina's sovereign bond maturing in 2035 rose 4.3 cents to over 60 cents, its highest level in two weeks. The peso/dollar exchange rate closed up 0.7%, reversing a previous loss of as much as 2.7%.

Risk Disclosure & DisclaimerMarkets carry risk, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the special investment objectives, financial condition, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific situations. Investment based on this material is at your own risk. ```