MEXICO: USDMXN Holding Pattern Remains, Banxico’s Mejia at Banorte Event
Mar-12 11:32
- USDMXN remains in a holding pattern, having broadly respected a 20.20-40 range across the past four trading sessions. The peso has been resilient to the waning sentiment across major equity benchmarks, with the broader dollar weakness helping to cap the USDMXN topside.
- Short-term technical parameters are well defined, with key support at 20.1343, the Jan 24 low, gaining more attention. A clear break of this level would highlight a potential reversal and open the 20.00 handle and 19.7618, the Nov 7 2024 low.
- Attention will be on President Sheinbaum’s press briefing today at 1330GMT(0930ET). As a reminder, Economy Minister Marcelo Ebrard was in Washington yesterday for trade talks with US officials centred around aluminium and steel. Separately, US financial authorities on Tuesday said they will require money services businesses operating near the Mexican border to report much smaller transactions as part of efforts to target money laundering by drug cartels. (BBG)
- US CPI data takes the spotlight on Wednesday amid a vacant domestic calendar. Banxico Deputy Governor Omar Mejia and Finance Ministry Chief Economist Rodrigo Mariscal will speak in an event hosted by Banorte from 1900GMT/1500ET in Mexico City. Banxico’s second meeting for 2025 falls on March 27, where consensus expectations are for another 50bp cut to 9.00%.
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STIR: Fed Rate Path Consolidates NFP Hawkish Shift
Feb-10 11:30
- Fed Funds implied rates are little changed from Friday’s close, with little net impact from President Trump saying Sunday he will impose fresh 25% tariffs on all steel and aluminum imports.
- It does however help consolidate the hawkish shift seen on Friday’s NFP report. See a recap of it here and a summary of all the main macro developments of the week here.
- Cumulative cuts from 4.33% effective: 2bp Mar, 7.5bp May, 15bp Jun, 20bp Jul, 26.5bp Sep and 36.5bp Dec.
- Today sees a particularly light macro docket, with calendar focus on Chair Powell’s Senate testimony on Tue before CPI on Wed. Of course, politics will remain at the fore with Trump having pledged to announce reciprocal tariffs on Tue or Wed.
BUNDS: Block trade
Feb-10 11:26
Bund Block trade, suggest seller:
- RXH5 ~2.14k at 133.29.
LOOK AHEAD: Monday Data Calendar: NY Fed Inflation Expectations, Tsy Bill Sales
Feb-10 11:26
- US Data/Speaker Calendar (prior, estimate)
- 10-Feb 1100 NY Fed 1-Yr Inflation Expectations (3.0% prior, --)
- 10-Feb 1130 US Tsy $84B 13W & $72B 26W Bill auctions
