MEXICO: Banxico Expected To Deliver Another 50bp Cut Next Week
Mar-21 11:22
- USDMXN is trading in a tight range ahead of the NY crossover, with the pair marginally higher on the day, having closed above the prior breakout level ~20.13 yesterday. That close bolsters the threat of a stronger reversal higher, with initial resistance seen around the 20-day EMA at 20.2252. Above here, a more significant target will be the 50-day EMA around 20.32 and March 11 highs at 20.40.
- No macro data are due today, with attention on bi-weekly CPI and economic activity figures on Monday, followed by retail sales and trade data later in the week. Focus, however, will be on Thursday’s Banxico MPC meeting, where the central bank is widely expected to deliver another 50bp rate cut to 9.00%, amid weak economic activity and moderating inflation pressures.
- Yesterday’s Citi survey revealed that analysts see GDP growth of just 0.6% this year (down from 0.8% previously), with the policy rate ending the year at 8.00% (vs. 8.25% previously).
- On the political front, President Sheinbaum will hold her usual daily press conference at 1330GMT(0930ET), before participating at an event in Guelatao de Juarez, Oaxaca at 2000GMT(1600ET).
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EGBS: Bund ration Put Spread
Feb-19 11:18
RXM5 130.50/129.00ps 1x2, bought the 1 for -19 (receive) in 2k.
STIR: Year-end ECB Implied Rates Rise 4bps On Schnabel Comments
Feb-19 11:18
Hawkish repricing in ECB-dated OIS following Executive Board member Schnabel’s interview with the FT. OIS price 72bps of easing through year-end (vs 76bps before the interview was released).
- Schnabel’s comments were hawkish leaning, but not overly surprising given her traditional stance on monetary policy. In particular she said “we are getting closer to the point where we may have to pause or halt our rate cuts”
- There are 54bps of cuts priced through the June decision (i.e. more than fully pricing 2x25bp cuts across the next three meetings).
- March pricing is unsurprisingly stickier (23.5bps of cuts priced vs 24bps prior), with a 25bp cut comfortably baked into consensus already. Schnabel said the bank will have a discussion on dropping the reference to policy restrictiveness in March, but did not provide any further signals for the decision.
- Euribor futures now -1.5 to -4.5 ticks through the blues.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.431 | -23.5 |
| Apr-25 | 2.290 | -37.7 |
| Jun-25 | 2.127 | -53.9 |
| Jul-25 | 2.073 | -59.3 |
| Sep-25 | 1.998 | -66.8 |
| Oct-25 | 1.977 | -68.9 |
| Dec-25 | 1.945 | -72.2 |
| Feb-26 | 1.941 | -72.5 |
| Source: MNI/Bloomberg. | ||
EGB SYNDICATION: 15-year SlovGB: Spread Set
Feb-19 11:16
- Spread set at MS+130bps (guidance was MS + 140bps area)
- Size: EUR Benchmark (MNI expects E2.5-3.5bln)
- Books in excess of €4.75bn (incl. €385mm JLM interest)
- Maturity: 27 February 2040
- Settlement: 27 February 2025 (T+6)
- ISIN: SK4000026845
- Bookrunners: HSBC (DM/B&D) / JPM / Slovenska sporitelna (Erste Group) / Tatra banka (RBI Group)
- Books to close at 12:00 LDN / 13:00 CET
From market source
