MEXICO: USDMXN Edges Higher Amid Tariff Uncertainty, TIIE-F Swap Rates Decline
Feb-27 18:17
- Despite the ongoing pressures at Pemex and broad greenback strength following the retraction of the tariff deadline extension by President Trump, the Mexican peso has remained relatively resilient today. USDMXN trades around the 20.50 level, just 0.3% higher on the day, below yesterday’s high at 20.55 and initial resistance at 20.7132, the Feb 05 high.
- Pemex CFO Juan Carlos Carpio said that the reorganisation of the company will be finished in the coming weeks and that a business plan for the period through 2030 will be published by Q3.
- In the Q4 earnings call, Carpio also said that state support for Pemex’s debt will continue and that the company is working with banks and the finance ministry on a plan to speed up payments to its suppliers.
- Meanwhile, the finance ministry is considering how it may use Pemex’s debt ceiling for liability management operations.
- TIIE-F swap rates are slightly outperforming, with yields down by a further 2-3bp, taking the decline in long-end yields over the last week, after the dovish tilt from Banxico, to over 25bp.
- Following today’s increase in the unemployment rate to 2.7% in January, tomorrow’s public balance and net outstanding loans figures are unlikely to have a major impact on sentiment.
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PIPELINE: Corporate Bond Issuance Update: $3B American Express 3Pt Launched
Jan-28 18:17
- Date $MM Issuer (Priced *, Launch #)
- 01/28 $3B #American Express $1.45B 6NC5 +75, $300M 6NC5 SOFR+102, $$1.25B 11NC10 +90
- 01/28 $2B Carnival Corp 8NC3
- 01/28 $2B #Arab Republic of Egypt $1.25B 5Y 8.625%a, $750M 8Y 9.45%
- 01/28 $1.75B #Capital One 11NC10 +162
- 01/28 $750M *Ziraat Bank 5Y 7.375%
- 01/28 $500M #Aircastle 5Y +108
- 01/28 $Benchmark Toronto-Dominion Bank 3Y +62, 3Y SOFR+82, 7Y +87
- 01/28 $Benchmark JPMorgan PerpNC5 6.5%
- 01/28 $Benchmark ForteBank 5Y 8%a
BONDS: MNI Europe Pi: German Contracts Remain Structurally Short/Flat (1/2)
Jan-28 18:16
From our Europe Pi Positioning Analysis (PDF Here)
- German contracts are in flat/short structural positioning.
- Bobl remains in short territory (though previously was "very short"), joining Buxl with the "short" designation.
- Bund has bucked the wider trend, moving to flat from short, while Schatz remains flat. The most recent week saw shorts set and longs reduced.
US TSYS/SUPPLY: Review 7Y Auction: Second Consecutive Stop
Jan-28 18:07
- Tsys futures paring losses (TYH5 currently 108-30.5 last, -6.5) after the $44B 7Y note auction (91282CMC2) stops 0.8bp through with 4.457% high yield vs. WI of 4.465%; bid-to-cover 2.64x vs. 2.76x prior.
- Peripheral stats: Indirect take-up falls back to 67.08% vs. 87.88% in December; Direct take-up rebounds off lat month's record low of 2.84% to 23.06%; Dealers take 9.86% vs. 9.27% prior.
- The next 7Y Treasury auction is tentatively scheduled for February 26
