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Banxico To Assess Impact Of Rising U.S. Yields

MEXICO
  • Mild optimism in the Bloomberg Dollar Index from the open evaporated this morning and caused a sharp turnaround in USDMXN. Notable 1% range perhaps unwarranted due to the lack of news flow, however, we trade just 0.15% off Friday's close and still above Thursday's worst levels of 20.5862. The moves are also in line with moves seen in USDTRY and USDZAR.
  • Over the weekend, central Bank Governor Diaz de Leon reiterated that next week's Banxico meeting is very live as the committee will assess the 'as-yet unclear' impact of U.S. stimulus and rising yields on inflation and growth.
  • A markedly empty data calendar this week, local assets will be expected to trade in tandem with broader global developments as we approach the FOMC decision this coming Wednesday.

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