MEXICO: USDMXN Bearish Trend Intact, Sheinbaum Meeting With Carney Later
Sep-18 16:43
- The Mexican peso is trading with a softer tone against the dollar Thursday, after the better-than-expected US data supported the relief rally for the greenback. Despite the broad dollar strength, however, USDMXN remains only 0.2% higher on the session, at typing, and within sight of yesterday’s cycle low at 18.20.
- A bearish trend condition in USDMXN remains intact, with this week’s move lower marking an extension of the current downtrend. Next support is seen at 18.1837, the 61.8% retracement of the Apr 9 ‘24 - Feb 3 bull leg, ahead of the 18.00 handle. Initial resistance at the 20-day EMA is at 18.5408.
- Ahead of her meeting with Canadian Prime Minister Mark Carney today, President Sheinbaum said at her daily press conference earlier that she will discuss ways to strengthen trade between the two countries via ports, rather than road or rail through the US. As noted, a press conference following the meeting is scheduled for 0000BST(1900ET).
- Datawise, Q2 aggregate supply and demand figures tomorrow and economic activity and bi-weekly CPI stats next week are unlikely to derail a Banxico rate cut next Thursday. In line with consensus, CIBC also continues to expect a 25bp rate cut next week, with further cuts to follow to a 6.50% terminal rate. For USDMXN, however, they retain an upward bias into year-end, but recommend initiating long positions on dips toward 18.20.
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PIPELINE: Corporate Bond Update: $5B IBRD Priced, Guidance Updates
Aug-19 16:28
- Date $MM Issuer (Priced *, Launch #)
- 08/19 $5B *IBRD (World Bank) 10Y SOFR+60
- 08/19 $4B #EIB 5Y SOFR+39
- 08/19 $1.25B #Allianz Perp-NC8.7 6.55%
- 08/19 $1B #DBJ 3Y SOFR+50
- 08/19 $1B #MetLife $600M 3Y +45, $400M 3Y SOFR+70
- 08/19 $750M #CCDJ 5Y +75
- 08/19 $Benchmark Pricoa Global Funding 7Y +100a
- 08/19 $Benchmark National Rural Utilities 3Y +48
- 08/19 $Benchmark British Colombia 5Y SOFR+56
- 08/19 $Benchmark Hanover Insurance 10Y +150a
- 08/19 $Benchmark MassMutual 10Y +78
US STOCKS: Midday Equities Roundup: Communication Services, Chip Stock Lagging
Aug-19 16:21
- Stocks trade mixed early Tuesday, well off early highs - the DJIA outperforming weaker SPX emini and Nasdaq indexes ahead midday. Currently, the DJIA trades up 6.44 points (0.01%) at 44921.68, S&P E-Minis down 29.25 points (-0.45%) at 6440, Nasdaq down 243.1 points (-1.1%) at 21385.81.
- As noted in the 1113ET bullet, aside from a sell-program, Communication Services and Information Technology sectors underperformed in the first half, the former weighed by Trade Desk -3.38%, Netflix -3.22%, Paramount Skydance -2.33%, Warner Bros Discovery -2.16% and Meta Platforms -1.85%.
- The IT sector was weighed by: Palantir Technologies -5.83%, Jabil -4.31%, Advanced Micro Devices -3.93%, Oracle -3.92% and Super Micro Computer -3.35%.
- On the positive side, Real Estate, Consumer Staples and Health Care sectors outperformed. Investment trust stocks supported the former following this morning jump in (albeit volatile) Housing Starts data: Prologis Inc +4.01%, Federal Realty Investment +1.90%, Kimco Realty +1.85% and Weyerhaeuser +1.71%.
- Supporting Consumer Staples stocks included: Kenvue +1.59%, Colgate-Palmolive +1.52% and Kroger +1.39%. Meanwhile, pharmaceuticals buoyed the Health Care sector in the first half: Waters Corp +2.39%, West Pharmaceutical +2.34%, Baxter International +2.16% and Labcorp Holdings +2.00%.
BONDS: EGBs-GILTS CASH CLOSE: Gilts Underperform Again Pre-UK CPI
Aug-19 16:17
European curves flattened Tuesday, with Gilts underperforming yet again ahead of UK CPI data.
- With no evident catalysts today amid a thin data/speaker slate, Monday's weakness in Gilts on the back of lingering fiscal concerns spilled over into today's session. 10Y Gilt yields hit a fresh post-May high (4.756%) in early trade.
- Bund yields traded almost entirely within the prior session's ranges, with the 2.80% level holding for the 10Y. Longer-end German instruments led the space overall in a broader rally over the most of the remainder of the session, with Buxl rallying after yields hit a fresh post-2011 high.
- Yields fell to session lows a little over an hour before the cash close, as equities tumbled (led by US megacap tech), resulting in a modest safe-haven bid that also saw periphery EGB spreads move a little wider.
- The German curve bull flattened on the day, with the UK's twist flattening. Periphery/semi-core EGB spreads closed mixed, with BTPs underperforming.
- Attention Wednesday will be on the UK CPI report. MNI's preview is here: the BOE MPC is focused on headline CPI which is expected to come in higher than in June.
- We also get an appearance by ECB's Lagarde and the Swedish Riksbank decision, as well as final Eurozone July inflation.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.1bps at 1.958%, 5-Yr is down 1.3bps at 2.306%, 10-Yr is down 1.3bps at 2.75%, and 30-Yr is down 1.5bps at 3.323%.
- UK: The 2-Yr yield is up 1.5bps at 3.98%, 5-Yr is up 1.5bps at 4.138%, 10-Yr is up 0.2bps at 4.74%, and 30-Yr is down 0.9bps at 5.602%.
- Italian BTP spread up 1.2bps at 80.5bps / French OAT down 0.1bps at 68.3bps
