MEXICO: USDMXN Spikes To Fresh Weekly High, Tests 50-Day EMA Resistance
Oct-10 15:09
- USDMXN has spiked to a weekly high above the 18.50 handle in recent trade, mirroring weakness in other regional currencies, with spot currently 0.7% higher on the session. The move tested 50-day EMA resistance at 18.5434, a clear break of which would undermine the current bearish cycle and signal scope for a stronger corrective recovery.
- It comes as Trump posts to threaten more extensive tariffs against China as well as possibly withdrawing from his face-to-face meeting with Xi. The move also follows weaker-than-expected IP data earlier which reinforce expectations for further Banxico rate cuts ahead. Yesterday’s minutes maintained the cautiously dovish tone amid weak activity and sticky core CPI pressures, indicating the likelihood of another rate cut on Nov 6.
- In Goldman Sachs assessment, the majority of the MPC appear inclined to continue easing, brushing aside high core-goods inflation and services stickiness. GS expects the MPC to deliver another two cuts this year, in line with the Fed, with the policy rate reaching 7.00% by end 2025 and 6.50% by mid-2026.
- Similarly, JP Morgan thinks that the bar is very high for Banxico not to deliver 25bp rate cuts in the next couple of meetings. They also see Banxico cutting twice more in 1Q26 before halting at 6.5%. Core stickiness, tax/tariff inflation upside, and fewer Fed cuts stand as key risks at this juncture.
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PIPELINE: Corporate Bond Update: $3B KFW, $1B FHLB Priced
Sep-10 15:06
- Date $MM Issuer (Priced *, Launch #)
- 09/09 $3B #IDA (International Development Assn) 7Y SOFR+55
- 09/10 $3B *KFW 3Y SOFR+30
- 09/10 $1B *Federal Home Loan 2Y +3.5
- 09/10 $1B Light and Wonder 8NC3 6.5%a
- 09/10 $900M K Hovnian Ent $450M each: 5.5NC2.5, 8NC3
- 09/10 $900M Kingpin Intermediate Holdings 7NC3
- 09/09 $500M #Korea Housing Finance Corp (KHFC) 5Y +40
- 09/10 $500M #Bidvest WNG 7NC3 6.2%
- 09/10 $Benchmark Drawbridge 5Y +265a
- 09/09 $Benchmark Komatsu Finance AM 5Y +90
- 09/09 $Benchmark Saudi Aramco 5Y Sukuk +105a, 10Y +115a (books over $16.5B)
OPTIONS: Expiries for Sep11 NY cut 1000ET (Source DTCC)
Sep-10 15:04
- EUR/USD: $1.1635-50(E3.4bln), $1.1700(E1.1bln), $1.1735-50(E2.2bln), $1.1775(E645mln), $1.1800(E1.3bln), $1.1825(E2.2bln), $1.1850-65(E1.3bln)
- USD/JPY: Y145.75($1.1bln), Y146.50($690mln), Y146.80($650mln), Y147.10-20($1.2bln), Y149.00-15($801mln), Y150.00($1.1bln)
- GBP/USD: $1.3600(Gbp609mln)
CHINA: Annual Policy Report Prioritises Domestic Demand And Advancing Innovation
Sep-10 14:57
MNI London: Reuters reporting excerpts from the annual report on the implementation of this year's economic and social development plan, delivered by Zheng Shanjie, head of the National Development and Reform Commission, at the second plenary meeting of the 14th National People's Congress Standing Committee's 17th session in Beijing today.
- The report says policymakers will “better coordinate domestic economic work and international economic and trade struggles in the second half” and promote “proactive fiscal policy and a moderately loose monetary policy to fully unleash their effects.”
- The report highlights the orderly construction of Yarlung Zangbo River hydropower project as a priority. It advises “capacity management in key industries” and to “continue improving policy toolbox.”
- China Daily notes that the report said policymakers, in half two, “will prioritize releasing domestic demand potential, advancing technological and industrial innovation, deepening reforms, and expanding opening-up.”
- “Authorities will also focus on preventing and defusing risks in key areas, promoting coordinated development between regions and integrated urban and rural development, pushing for green and low-carbon growth, and improving people's livelihoods, according to the report,” per China Daily.
