MEXICO: USDMXN Holding Steady Ahead of FOMC Meeting, Q3 GDP Due Tomorrow
Oct-29 11:23
- Following the further US military strikes on alleged drug-running boats in international waters in the eastern Pacific yesterday, Mexico’s Foreign Minister Juan Ramon de la Fuente met with the US ambassador to Mexico to express President Sheinbaum’s concerns. After a cordial meeting, a statement from the Foreign Ministry said that the US agreed to fully respect national sovereignty and protect human lift in the oceans.
- Ahead of the NY crossover today, USDMXN is trading in a tight range, currently broadly unchanged around 18.43. The pair’s technical downtrend remains firmly intact, with 18.20-18.65 still the key short-term parameters.
- In terms of the macro calendar, no domestic data are due today, with focus ahead on the FOMC rate decision at 1800GMT(1400ET), when a further 25bp cut is widely expected. After today, attention turns to tomorrow’s Q3 Mexico GDP data, which is particularly important given the weak growth profile and Banxico’s emphasis on soft activity throughout the easing cycle. The data are expected to show a -0.3% y/y reading.
- On the political front, the Senate is due to begin debate on the revenue section of the 2026 budget from 1700GMT(1300ET).
- In other news, Nissan has said it will end production at its Compas plant in Mexico, according to a report on Bloomberg. This is part of a previously announced plan, reflecting broader strategic shifts within the company.
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GBP: FX Exchange Traded Option, Rolling Call
Sep-29 11:13
FX Exchange traded Option, rolling call:
- GBPUSD (3rd Oct vs 9th Jan) 126.00c, bought the Jan for 0.02 in 1.2k.
UK: Chancellor Delivers Speech To Labour Conference
Sep-29 11:10
Chancellor of the Exchequer Rachel Reeves is delivering her keynote address to the Labour party conference in Liverpool. Livestream here. Early in her speech, Reeves is interrupted by a pro-Palestinian protester, but resumes after a short pause. As noted earlier (see 'GILTS: Bull Flattening, Ramsden & Reeves Eyed', 10:34BST), the chancellor has reiterated Labour's manifesto pledge not to raise income tax, VAT, or employee national insurance.
- With a refusal to rule out tax rises in the November budget, the chancellor's pledge on the 'big three' revenue raisers leaves fewer options in terms of where the gov't can look to bolster its coffers (see 'UK FISCAL: VAT increase impacts on fiscal, CPI, monetary policy', 09:40BST).
- At ~15:00BST, Home Secretary Shabana Mahmood is due to deliver her keynote address. Given the prominence of immigration as a hot-button political issue in the UK at present, the new Home Secretary's plans for combating small boat crossings of the English Channel will be closely scrutinised amid continued strong polling for the right-wing populist Reform UK.
OUTLOOK: Price Signal Summary - Bear Threat In Bunds Still Present
Sep-29 11:08
- In the FI space, Bund futures have recovered from their recent lows. However, key support and the bear trigger remains exposed, it lies at 127.61, the Sep 3 low. Clearance of this level would cancel a recent bullish theme and confirm a continuation of the medium-term bear cycle. For bulls, a reversal higher would refocus attention on key resistance at 129.44, the Sep 10 high. First resistance is at 128.61, the 50-day EMA.
- Gilt futures traded lower late last week. The move down strengthens a bearish theme and does suggest the end of the recent corrective phase between Sep 3 - 11. Note that on the continuation chart, moving average studies are in a bear-mode position, highlighting a dominant downtrend. A continuation lower would open 89.94, the 76.4% retracement of the Sep 3 - 11 corrective phase. Initial resistance to watch is 91.28, the Sep 24 high.
