Argentina skeptically awaits debt default court hearing

Argentina's government said on Friday it expected nothing favorable to come out of a court hearing in New York later in the day in its debt default case, as the country's domestic markets looked to optimism for an eventual deal. Latin America's No. 3 economy defaulted on its debt for the second time in 12 years after failing to cut a deal with holdout creditors suing it for full payment on bonds bought at a steep discount after a $100 billion debt default in 2002. Prices on Argentina's credit default swap contracts - the price of insuring Argentine debt - held steady early on Friday. "The market is placing a very high probability on Argentina reaching an agreement with the holdouts within the next 6 months in which case ... the actual market impact could be short-lived," said Ander Faergemann, senior emerging debt fund manager at PineBridge Investments in London.

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