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Argentine Bonds Sink Into Distressed Territory as Macri Falters

  • Spread over Treasuries breaches distress level of 1,000 bps
  • Emerging markets dropping on stronger dollar, growth concerns
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Argentine markets fell for a second day as the chance of a potential default rose to over 60 percent on doubts that President Mauricio Macri will be able to fend off his populist foes and win re-election this year.

Yields on the government’s short-term dollar bonds rose as high as 20 percent, well into territory that analysts consider distressed, before trailing back to 18.24 percent on speculation the selloff was overdone. The peso is also off its lows for the day, though it’s still down 2 percent.