MEXICO: USDMXN Hovers In Close Proximity To Cycle Lows, Vehicle Sales Due
Oct-02 11:20
- While concerns surrounding the US government shutdown have continued to weigh on the US dollar on Thursday, USDMXN remains broadly unchanged heading into the NY crossover, with the pair holding around 18.38, around 1% above recent cycle lows, located at 18.20.
- Today, domestic vehicle sales stats cross at 1300BST(0800ET), ahead of gross fixed investment figures tomorrow. Meanwhile, the Finance Ministry will sell MXN 1bn of 2026 floating bonds and also MXN 1bn of 2028 floating bonds and MXN 1bn of 2030 floating bonds at 1830BST(1330ET).
- Earlier, reports showed that Mexico has started an antidumping investigation into imports of steel screws or threaded bolts from China, according to a resolution in the official gazette. As noted previously, this comes as part of President Sheinbaum’s proposal of a panel to address differences with China on tariffs, in the hope of also appeasing relations with the US administration.
- Meanwhile, three Senate committees approved a government proposal to reform Mexico’s rights protection law yesterday, according to Milenio. The reform, which seeks to prevent litigation on alleged rights violations from dragging on improperly, will now be discussed in both chambers of Congress.
- Separately, the Senate has approved a reform to strengthen procedures for injunction trials in a vote with 76 in favour and 39 against. The reform now passes to the Lower House.
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OUTLOOK: Price Signal Summary - Bear Cycle Extension In Gilts
Sep-02 11:17
- In the FI space, Bund futures are trading lower this week, however, for now, price remains above the August lows. Recently, resistance at the 50-day EMA at 129.74 has been pierced. A clear breach of the EMA would signal scope for a stronger recovery within the multi-month range. This would open 130.06, the Aug 14 high. Key support and the bear trigger to watch lies at 128.64. Clearance of this level would confirm a resumption of the downtrend.
- A bear cycle in Gilt futures is in play and a fresh cycle low Monday, and again today, reinforces current conditions. The continuation of the bear leg has resulted in a break of the 90.00 handle. Clearance of this level strengthens the downtrend and maintains the sequence of lower lows and lower highs. Sights are on 89.68, the Jan 15 low (cont). Initial firm resistance is at 90.84, the Aug 28 and 29 high.
EGB OPTIONS: Schatz outright Call buyer
Sep-02 11:14
DUX5 107.50c, bought for 5 in 3k.
BUNDS: Set to test the 2.80% Yield level
Sep-02 11:06
- Looks like the 2.80% Yield level is now too close not to be tested for Bund, now at 2.79%.
- For outright future levels, most will then look at the August low, situated at 128.64.
Looking further out in Yield, reference 128.78:
- 2.85% = 128.17.
- 2.90% = 127.66.
- 2.94% = 127.26 (2025 high in Yield and highest since Oct 2023).
