MEXICO: PMI, Remittances and Banxico Economist Survey Due
- Despite a broadly weaker greenback Friday, USDMXN has had a decent recovery off the 19.55 session lows and trades at 19.66 approaching the NY crossover. Overall, USDMXN has been respecting a new short-term range between 19.50/75, following the significant break of the post-US election range in mid-April.
- This week’s stronger-than-expected GDP data in Mexico has helped to allay short-term fears surrounding the growth trajectory and bolsters the renewed optimism for the peso. On the local docket - manufacturing PMI, remittances data and the latest central bank economist survey are all scheduled today. For reference, another 50bp rate cut from Banxico is firmly expected on May 15, which would bring the overnight target rate to 8.5%.
- On Thursday, President Sheinbaum said she had a “very positive conversation” with President Trump, agreeing that senior officials will continue working in the coming days on options to improve the trade balance and advance outstanding issues for the benefit of both countries.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSY OPTIONS: TYK5 113.25 Calls Sold
TYK5 113.25 calls 10K given at 0-17. Looks like new risk/hedging, with only ~8.5K OI in the contract as of yesterday.
GERMAN AUCTION PREVIEW: On offer next week
DFA has announced earlier that it will be looking to open a new 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047) at its auction scheduled for next Tuesday, April 8. DFA will be looking to sell E3bln of that Green Bund at the auction.
- In conjunction with that, DFA has announced there will be a simultaneous own-quota E1bln reopening of the twinned 2.50% Feb-35 Bund (ISIN: DE000BU2Z049).
- Recall Germany used to always reopen the twinned bond for own quota when selling Green issues. As standard, this is not the case anymore but we don't think this is a significant concern.
US 10YR FUTURE TECHS: (M5) Approaching Key Resistance
- RES 4: 112-23+ 1.618 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 3: 112-13 1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 2: 112-01 High Mar 4 and a bull trigger
- RES 1: 111-30+ High Apr 1
- PRICE: 111-25+ @ 11:05 BST Apr 2
- SUP 1: 110-26+ 20-day EMA
- SUP 2: 110-11/06 50-day EMA / Low Mar 27
- SUP 3: 110-00 High Feb 7 and a key support
- SUP 4: 109-21+ Trendline support drawn from the Jan 13 low
Treasury futures are holding on to their latest gains following the recovery from last week’s low of 110-06+ (Mar 27). The outlook remains bullish and attention is on key resistance at 112-01, the Mar 4 high. Clearance of this level would confirm a resumption of the uptrend and maintain a price sequence of higher highs and higher lows. This would open 112-13, a Fibonacci projection. Initial support to watch is 110-26+, the 20-day EMA.
