By Alejandro Lifschitz and Richard Lough BUENOS AIRES (Reuters) – 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. On international markets, Argentina’s dollar-demonintated bond due in 2033 slipped 3.842 points, or about 4.5 percent, to a bid price of 84.184 on Friday. Prices on Argentina’s credit default swap contracts – the price of insuring Argentine debt – held steady early on Friday.

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