Citi(US:C) Hua Er Jie Jian Wen·2025-10-10 02:40Core Insights - The intervention by the U.S. Treasury to support the Argentine peso has led to a shift in Wall Street's attitude towards Argentine assets [1][2] - Citigroup has recommended a long position on Argentina's BONTE 30 bonds, citing external support as a catalyst for potential recovery ahead of the upcoming elections [1][2] - Despite the improved outlook, the upcoming midterm elections on October 26 pose a significant risk to the market, keeping local assets in a vulnerable state [1][2] Group 1: U.S. Treasury Intervention - The U.S. Treasury's intervention is viewed as a key external force stabilizing the Argentine currency, thereby reducing some of the currency risk for investors [2] - The positive market reaction indicates that investors are responding to the actual intervention actions taken [2] - The U.S. Treasury has directly purchased Argentine pesos in the spot market to support President Milei's economic reform agenda [6] Group 2: BONTE 30 Bonds - Citigroup's focus is on the BONTE 30 bonds, which are 30-month notes denominated in Argentine pesos but require subscription in U.S. dollars [2] - These bonds are attractive for investors looking to hedge against local currency fluctuations while investing in Argentina [2] Group 3: Market Reactions - Following the U.S. intervention announcement, Argentina's 2035 sovereign bonds rose by 4.3 cents to over 60 cents, marking a two-week high [6] - The Argentine peso appreciated by 0.7%, reversing a previous decline of up to 2.7% [6] - Investor confidence was shaken after President Milei's party faced unexpected losses in local elections, leading to a sell-off of the peso [2]