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MEXICO: Banorte See Greater Appetite for ST vs. LT Securities

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • Banorte have noted this week’s market attention will be on the Fed and Banxico minutes in search of clues on respective policy trajectories. Although Banorte expect Banxico to continue with rate cuts, closing the year at 8.50%, they consider that Cetes’ real yields look attractive.
  • As such, Banorte expect appetite for the securities on offer Tuesday will remain robust, in line with the latest issuances. In the previous primary auction, high demand for the 6-month tenor stood out with a bid-to-cover ratio of 5.3x, very close to highs not seen since the beginning of the year.
  • Additionally, Banorte anticipate moderate demand for the 10-year Mbono (Nov’34) close to the 2-year average of 2.0x as it continues to reflect a valuation with room for additional upward pressures even though last week’s performance diluted a good part of the rally recorded at the beginning of February.
  • For weekly ranges, Banorte expect the 10-year Mbono (Nov’34) to trade between 9.70% and 9.95%, and USDMXN between 20.10 and 20.55.
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  • Banorte have noted this week’s market attention will be on the Fed and Banxico minutes in search of clues on respective policy trajectories. Although Banorte expect Banxico to continue with rate cuts, closing the year at 8.50%, they consider that Cetes’ real yields look attractive.
  • As such, Banorte expect appetite for the securities on offer Tuesday will remain robust, in line with the latest issuances. In the previous primary auction, high demand for the 6-month tenor stood out with a bid-to-cover ratio of 5.3x, very close to highs not seen since the beginning of the year.
  • Additionally, Banorte anticipate moderate demand for the 10-year Mbono (Nov’34) close to the 2-year average of 2.0x as it continues to reflect a valuation with room for additional upward pressures even though last week’s performance diluted a good part of the rally recorded at the beginning of February.
  • For weekly ranges, Banorte expect the 10-year Mbono (Nov’34) to trade between 9.70% and 9.95%, and USDMXN between 20.10 and 20.55.