LONDON, July 31 (IFR) - The price of the restructured bond on which Argentina missed an interest payment, leading the country into a technical default, was stable in early London trading.
Argentina's Discount due 2033 notes were bid at a price of 95 as of 0800BST Thursday, according to Exotix, marginally higher than at the US close.
However, Stuart Culverhouse, head of research at Exotix, warned that "not too much should be read into this".
He added: "New York trading will drive [the price action]."
On Wednesday, the sovereign suffered its second default in 13 years, after failing to reach an agreement with holdout creditors, which prevented it from making the interest payment to holders of its restructured bond.
Reuters reported that Argentina's one-year CDS was quoted 21bp wider at the European open, according to Markit, at 4,708bp, though its five-year CDS was quoted 400bp tighter at 1,444bp, signalling investors believe a resolution will eventually be found.
"Argentina may end up in default for a short period, but as long as people are talking, it may not have such a big impact," said Culverhouse.
Just hours after S&P downgraded the country to selective default, mediator Daniel Pollack said Argentina would "imminently" be in default on its obligations.
"The ordinary Argentine citizen will be the real and ultimate victim," said Pollack, after the talks failed to placate the holdouts demanding full payment on their bond holdings.
Economy Minister Axel Kicillof said the country could not obey a US court order to pay the holdouts in full. (Reporting by Sudip Roy and Abhinav Ramnarayan (additional reporting by Carolyn Cohn); editing by Helene Durand and Philip Wright)