MEXICO: CIBC Update Rate Forecast to Incorporate Front-Loaded Easing

• The Dollar is mostly seeing a two way price action overall, it was in the Green against all G10s, it then saw some broader selling interest as Core Bonds edged higher in early trade, mostly led by the French and Italian Bonds.
• Since Bonds futures have now pretty much reversed the early bid (Yields higher), the Dollar is now slightly more mixed, and the USDJPY is heading back up to 156.00, although it did print a 156.11 high Overnight.

• In the FI space, Bund futures are holding on to their recent gains. The Jan 15 rally highlighted a reversal signal - a bullish engulfing candle. It suggests scope for a continued corrective phase that is allowing an oversold trend condition to unwind. Sights are on 132.41, the 20-day EMA. The medium-term trend is unchanged, it remains bearish. The bear trigger has been defined at 130.28, the Jan 15 low, a break would resume the downtrend. First support lies at 131.00, the Jan 16 low.
• The medium-term trend condition in Gilt futures is unchanged, the direction remains down. However, strong gains last week highlight a corrective phase and signal scope for a continuation higher near-term. This week’s climb reinforces current short-term conditions. The 20-day EMA, at 91.62, has been breached. The focus is on 92.75, 50.0% of the Dec 3 - Jan 13 bear leg. Initial support lies at 90.68, the Jan 16 low.

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