MEXICO: Ebrard to Speak on Trade, MXNJPY Highest Since July 2024
Nov-19 11:34
- MXN continues to trade in resilient fashion, having shrugged off the brief weakness tied to broader risk concerns earlier in the week. The punchy price action in FX is most notable for the peso against the Japanese yen, with MXNJPY rising above the 8.50 pivot to reach the highest level since July 2024.
- For USDMXN, spot has edged lower towards 18.30, with the cycle lows around 18.20 continuing to provide the nearest obstacle to the next leg lower.
- Market participants will pay attention to Economy Minister Marcelo Ebrard on Wednesday, who is expected to speak at President Sheinbaum’s daily press conference about trade and direct foreign investment. Previously, Ebrard said the government is working to conclude the current stage of trade talks with the US this month, adding that he would probably travel to DC to conduct said negotiations.
- In an Ecomomista article, Banxico Deputy Governor Cuadra confirmed his easing bias, stating that an atypically high interest rate, with inflation that is trending downward and a weak dollar, provides room to cut rates. As mentioned, he shared a pessimistic view on growth, indicating that the expansion of economic activity may be less than the 0.6% currently forecasted for 2025.
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OUTLOOK: Price Signal Summary - Bull Phase In Gilts Remains Intact
Oct-20 11:24
- In the FI space, despite strong selling pressure on Friday, a bull cycle in Bund futures remains intact. The impulsive nature of the latest rally and a fresh cycle high on Friday, paves the way for a test of the next key resistance 130.80, the Jun 13 high. Clearance of this level would strengthen the bullish condition. Note that the contract is overbought, a deeper pullback would allow this condition to unwind. Key support is 129.12, the 20-day EMA. Initial firm support is 129.44, the Sep 10 high.
- A bull cycle in Gilt futures remains intact and last week’s strong impulsive rally reinforces current conditions. Recent gains resulted in a breach of key resistance at 91.82, the Sep 24 high. The break opens 93.30 next, a 1.236 projection of the Sep 3 - 11 - 26 price swing. Note that the trend is overbought and a deeper retracement would allow this condition to unwind. Key support to watch lies at 91.39, the 20-day EMA. Initial firm support is at 91.82, the Sep 24 high and a recent breakout level.
UK: MNI Gilt Week Ahead: Another huge data week to come
Oct-20 11:18
Full MNI Gilt Week Ahead here.
- It will be another busy week for UK data next week with fiscal data due for release on Tuesday, CPI on Wednesday and retail sales and flash PMI data due on Friday. Note that these will be the last releases of these data to be included in both the November MPR and the OBR's forecasts for the Budget.
- We look at the weekend's fiscal news and the impact on CPI that different changes to energy taxation could have.
- We also look back at last week's main MPC comments and ahead to this week.
- The full document also includes supply previews for the week ahead, balance sheet and repo operations trackers, a UK-focused calendar and a summary of gilt operations and the DMO's issuance plans.
EGB OPTIONS: Bund downside Put Spread
Oct-20 10:57
RXF6 129.00/127.50ps, bought for 33 in 2k.
