MEXICO: December Rate Cut Still Likely Amid Pressures on Growth
Nov-27 11:53
- USDMXN price action remains muted with the US on its Thanksgiving holiday, with the pair continuing to hold below the 50-day EMA. A bearish trend remains in place, with sights on cycle lows around the 18.20 level. Yesterday’s Banxico Q3 quarterly inflation report offered few surprises, with the Board continuing to flag the weak growth backdrop following soft Q3 data, while raising its CPI inflation forecasts in line with those at the Nov 6 MPC meeting.
- The Bank still expects inflation to reach 3% by Q3 2026, but Governor Rodriguez noted that the rate cutting cycle could proceed at a more gradual pace in 2026, which is consistent with the forward guidance from the MPC meeting that raised the possibility of a pause in the easing cycle early next year. Meanwhile, Deputy Governor Heath continued to flag his doubts about a convergence of inflation to the 3% target next year.
- Against this backdrop, Goldman Sachs still expects two 25bp rate cuts to 6.5% next year (after a Dec cut), but they do not rule out a pause early in the year.
On the data front, headlines just crossing on Bloomberg indicate the the trade surplus printed at $606mn in October, well above the consensus for a $589mn deficit. This follows a $2.4bn deficit in September.
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OPTIONS: Expiries for Oct28 NY cut 1000ET (Source DTCC)
Oct-28 11:52
- EUR/USD: $1.1600(E874mln), $1.1625-35(E1.9bln)
- USD/JPY: Y152.50($720mln), Y152.95-00($1.0bln), Y153.35-50($609mln)
- AUD/USD: $0.6475(A$573mln)
EGB SYNDICATION: New 12-Year SlovGB: Spread Set
Oct-28 11:51
- EUR Benchmark (MNI expects E1.5-E2.5bln) of the new 12-year Nov-37 SlovGB
- Spread set at MS+99 (revised guidance was MS+100 Area, following guidance at MS+105 Area)
- Books in excess of E3.7bln
- Coupon: Annual, act/act ICMA
- Format: Reg S CAT1, bearer
- Settlement: Nov. 4, 2025 (t+5)
- ISIN: SK4000028304
- Bookrunners: Citi, CSOB, DB (B&D), JPM
- Timing: May price today
Per Bloomberg / DJ, with MNI color
BTP: Block trade
Oct-28 11:50
BTP Block trade, suggest seller:
- IKZ5 1.42k at 121.38.
