MEXICO: Security Cabinet Briefing, Sheinbaum Set To Nominate Deputy FinMin
Aug-13 11:08
- The Mexican peso is trading with a positive tone ahead of the NY crossover, as the US dollar remains under pressure for a second consecutive session following yesterday’s CPI data, which cleared the last hurdle for the Fed to resume an easing cycle from September. USDMXN has dipped by 0.4% to around 18.53, narrowing the gap to next support at 18.4302, the Aug 1 ‘24 low.
- On the political front today, Mexico’s security cabinet is set to hold a press conference on the government’s decision to transfer 26 inmates with ties to organised crime to the US. The transfer included inmates with linkages to the most powerful drug cartels.
- Meanwhile, President Sheinbaum is said to be preparing to nominate Maria del Carmen Bonilla as deputy finance minister after five months without anyone in the role. Bonilla is currently in charge of the ministry’s public credit unit, and in the new role she would help to plan the government’s financial strategy, including steering funding for Pemex.
- In terms of the macro calendar, ANTAD same-store sales and the latest nominal wage figures, both for July, remain scheduled for release sometime this week, potentially today.
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BONDS: Gilts Outperform
Jul-14 11:04
Core global FI markets consolidate off lows as NY participants settle in.
- Asia trade was shaped by digestion of the increased U.S. tariff threats against the EU & Mexico, as well as U.S.-Russia tension.
- A bid in crude oil (linked to the latter point above) and gilt outperformance in light of dovish comments from BoE Governor Bailey and a soft REC labour market release then came to the fore as the London morning wore on, driving gilt outperformance vs. peers across the curve.
- Meanwhile, Tsys lag German peers, while EGB spreads to Bunds are wider as equities hold lower on the day (albeit with major index futures recovering from worst levels).
US: MNI POLITICAL RISK - Trump Meets Rutte Ahead Of Russia Statement
Jul-14 11:04
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- At 10:00 ET 15:00 BST, President Donald Trump will meet NATO Secretary General Mark Rutte at the White House. According to Trump’s diary, the meeting will be closed to the press. At some point today, Trump is expected to make a ‘major statement’ on Russia, likely to include new weapons shipments to Ukraine and the possible endorsement of sanctions on Russia.
- Trump concluded his tariff week with Saturday letters to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, setting a 30% tariff rate for both trading partners.
- EU trade commissioner Maros Sefcovic said before a meeting of EU trade ministers this morning: "The feeling on our side was that we are very close to an agreement."
- Former President Joe Biden’s chief economic advisor, Jared Bernstein, wrote in an op-ed that he is, "joining the hawks", warning that Trump's Big Beautiful Bill is "a potential game changer for debt sustainability.”
- House Republicans will take up three major bills during their 'crypto week'.
- The Senate is expected to take up Trump’s USD$9.4 billion rescissions package.
- Trump’s Middle East Special Envoy Steve Witkoff said he is “hopeful”, when asked about the status of Gaza ceasefire talks.
- WSJ reports that Trump signalled he would support Israel in another attack, if Iran were to take steps towards making a nuclear bomb.
- Poll of the Day: 70% of independents oppose Trump's immigration policies.
Full Article: US DAILY BRIEF
US TSYS: Mildly Lower With Tariff Talk Deliberations And Russia Statement Eyed
Jul-14 11:01
- Treasuries trade mildly lower from Friday’s close, keeping to relatively narrow ranges for the session as they consolidate the sell-off seen Thu/Fri last week.
- President Trump has threatened 30% tariffs on EU and Mexico (its largest and second largest source of imports as of 2024 trade) ahead of an Aug 1 deadline. Talks will continue in the interim.
- Trump meets the NATO Secretary General Rutte at 1000ET and has also said a “major statement” on Russia is due.
- Cash yields are 0-1.5bp higher on the day.
- 30Y yields touched 4.9791% earlier (currently 4.965%) for highs since Jun 9 having last sustainably been above 5% in May.
- 5s30s of 99.1bps is elevated but remains below last month’s fresh ytd highs of 103.3bps.
- TYU5 is slightly higher at 110-26 (+03) as it roughly consolidates Friday’s decline to 110-22+, amidst slightly elevated cumulative volumes of 300k.
- Support at 110-21+ (Jul 8 low) and 110-17 (61.8% of May 22 – Jul 1 bull leg) holds for now, with declines undermining a previous bull theme.
- Data: None
- Fedspeak: None
- Bill issuance: US Tsy sell $82bn 13-W and $73bn 26-W bills (1130ET)
