MEXICO: Pullback In USDMXN Extends To Over 4%
Sep-13 14:20
- The pullback in USDMXN from this week’s highs continues today, with the pair currently down by 1.2% on the day around 19.30, taking the move from Wednesday’s peak to more than 4%.
- The move comes as Congress finalises proceedings on the judicial reform today, with lawmakers to count votes from state legislatures in favour of the bill at 0000BST(1900ET).
- Despite the bullish technical theme prevailing, price action has significantly narrowed the gap towards key support, which remains at the 50-day EMA, at 19.0611. A clear break of this average would be a bearish trend development.
- On the data front, nominal wages figures for August may cross at some point today. After this release, the domestic calendar remains light of tier one data until retail sales figures on Sep 23.
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EQUITIES: Estoxx put seller
Aug-14 14:19
SX5E (20th Sep) 4700p, sold at 70.50 in 12k.
GILTS: /STIR: BMO Stick To BoE Rate Cut Call, Like 5s10s Steepeners
Aug-14 14:18
BMO suggest that “this week’s UK data have, overall, moved in the right direction for the BoE… but the data has not improved enough for the MPC to accelerate the path of rate cuts”
- As such, they still expect the MPC to deliver 25bp cuts in both Nov and Feb.
- Markets wise, they think “the UK front end rally is a fade, but recognise how volatile the strip is, and how closely it has been following U.S.”
- As a result, they point to 5s10s gilt steepeners as their preferred position to reflect their BoE view.
BONDS: Fresh Bid Seen
Aug-14 14:06
TY futures move back to pre-CPI levels as the details of the data continue to be digested.
- Zooming out, U.S. CPI and labour market data have softened enough to justify cuts, but don’t seem soft enough to endorse current market-implied pricing of the Fed policy rate path, at least at this juncture.
- Gilts the only major 10-Year futures contract to hit fresh session highs, with UK paper still outperforming curve-wide in the wake of this morning’s UK CPI data. ~48bp of ‘24 BoE cuts priced, comparing to ~44bp late yesterday and a little over 50bp In early London trade.
