We are a little more than a year into Mauricio Macri's presidency and optimism is running ever higher
that his "let's change" coalition could see the once-dominant Argentine economy return to prosperity and growth.
However, there is one area where progress has been more profound and that is the improvement of the international ties necessary for restoring confidence among global investors.
The new president knows that the foundation of any economic recovery is access to risk capital, and that international confidence and investment will be key to lowering borrowing costs and accelerating growth in Argentina.
The Argentine CDS spread (the cost to insure against default) has been contracting:
This has allowed the government to tap USD markets several times, most recently in January 2017 when it issued new five- and 10-year bonds at 5.25% and 6.875% respectively. This was testament to strong underlying demand as the so-called reflation trade following the election of US president Trump led to rising interest rates in the US and selling pressure in Latin American bonds.
More curiously, and confirming the shift towards more investor friendly policies, Moody's even acknowledged that the new government has "reversed the prior government's practice of misreporting basic macroeconomic data"!
New Argentine USD bonds have shaken off Trump-induced losses, but still trade below par:
The statement goes on to applaud Argentina for actively courting international investment; one major component of this process, of course, is the "world tour"
that president Macri has embarked upon this year. The tour began last month with the first official state visit to Spain since 2009, and will later this year see planned visits to China, Japan, and the United States.
Trust, however, can take years to build and only seconds to break, and there are few places where this holds more true than in international capital movements. Memories of the 2001 default, the contempt for international capital exhibited by previous governments (which eventually led to a second default in 2015), as well as years of fiscal irresponsibility will stay with investors for years, so while there many positive signs, Argentina's journey to restore confidence has just begun.