Monday, 11 August 2008

Argentina - concerns grow.

Argentine bond prices plunged more than 6% on Friday. Argentina suffered its worst week since the default of 2002. Although there are hopes that the president will strike a more conciliatory tune after the agricultural sector debacle, this does not look likely.

The market now believes it is only a matter of time until the government are replaced and history shows that such things in Argentina are generally chaotic. The markets are bracing for a default, even though the country's macroeconomic indicators are sound. Looks like Argentina will re-join the frontier market universe.

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