MEXICO: Banxico Minutes To Focus On Guidance For Further Easing
Oct-08 16:37
- Banxico will publish the minutes to its September 25 MPC meeting tomorrow, when it cut its overnight rate by a further 25bp to 7.5%, as expected, and maintained its guidance for further cuts ahead. (The MNI review is here.)
- The decision was split once again, with Deputy Governor Heath voting to keep the policy rate on hold amid his concerns about the persistence of core CPI inflation. Against this backdrop, the minutes will be watched for discussions around the willingness of the various Board members to extend the easing cycle further into year end.
- In the minutes, Goldman Sachs will be looking out for discussion about the appropriate near-term monetary policy stance as well as the risks of a tight Mex-US interest rate differential. They will also be watching for discussion about the impact on 2026 inflation of proposed budget measures and the increase in import tariffs, and whether sticky core inflation merits a more cautious easing pace.
- Meanwhile, JP Morgan believes that the message will probably circle around the proper guidance to communicate further easing this year, rather than thinking about pausing. Yet, there are some emerging concerns that could vindicate the hawkish member, including rising CPI expectations. The debate on MXN dynamics should be important as well. JPM still expects 100bp of additional cuts to 6.5% by March 2026, but risks for a phase of intermittent cuts are slowly emerging.
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PIPELINE: Corporate Bond Update: $2B Home Depot Launched
Sep-08 16:16
- Date $MM Issuer (Priced *, Launch #)
- 09/08 $2.05B NCL Corp $1.025B each: 5.25NC2, 8NC3
- 09/08 $2B #Home Depot $500M 3Y +30, $500M 5Y +45, $1B 10Y +63
- 09/08 $1.75B #Duke Energy $1B 10Y +95, $750M 30Y +103
- 09/08 $500M #Puget Sound Energy WNG 30Y +88
- 09/08 $500M Millrose Properties 7NC3 65
- 09/08 $500M Antero Midstream 8NC3
- 09/08 $Benchmark Bank of Nova Scotia 3NC2 +75, 3NC2 SOFR, 6NC5 +100a, 6NC5 SOFR
- 09/08 $Benchmark Equitable America Global Funding 2Y +80a, 2Y SOFR, 7Y +115a
- 09/08 $Benchmark Hewlett Packard 2Y +85a, 3Y +95a, 3Y SOFR, 5Y +110a
- 09/08 $Benchmark Elevance 3Y +55, 7Y +80, +10Y +95, 30Y +110
- 09/08 $Benchmark Wells Fargo 4NC3 +90a, 4NC3 FRN, 11NC10 +115a
- 09/08 $Benchmark Korea Development Bank 5Y SOFR+68a
- 09/08 $Benchmark Capital One 6NC5 +92, 11NC10 +115
- 09/08 $Benchmark Ares Strategic Inc +3Y +185, +5Y +210a
- 09/08 $Benchmark Virginia Electric 10 +110a, 30Y +115a
- 09/08 $Benchmark Danske Bank 6NC5 +105a, 6NC5
- 09/08 $Benchmark Uber +5Y +90a, 10Y +110a
- 09/08 $Benchmark Westpac NZ 5Y +65
- 09/08 $Benchmark Denso 5Y inv calls
- 09/08 $Benchmark PIF 10Y +120a
SOFR OPTIONS: BLOCK: Mar'20 SOFR Calls
Sep-08 16:08
- 20,000 SFRH6 97.00 calls, 11.0 vs. 96.65/0.28% at 1158:51ET
FOREX: EURJPY Eyes Key Bull Trigger at 173.97
Sep-08 16:05
- Japanese developments have prompted a more notable 0.4% increase for EURJPY, which earlier in the session traded within 7 pips of key resistance and the bull trigger at 173.97. Clearance of this level would confirm a continuation of the bull cycle and place the cross at the highest level since July 2024, levels reached shortly before the BOJ’s multiple bouts of intervention.
- 174.86 would be the next chart level (a Fibonacci projection), before 175.43, last year’s high.
- Japan PM Ishiba's resignation triggered an immediate leadership race in the LDP, with Thatcherite MP Sanae Takaichi a front-runner among many opinion polls. She's made clear her preference for easy monetary policy and a bigger role for fiscal spending.
- Bank of Japan officials are watching for signs that a stock market correction, combined with fiscal expansion concerns, could accelerate longer-term yield moves and steepen the JGB curve, potentially prompting the Ministry of Finance to cut issuance in Q4, which would mean the BOJ could scale back its own purchases in order to maintain liquidity, MNI understands.
