Free Trial

CIBC Prefer Long BRLMXN To Convey Fed/Banxico Decoupling

LATAM FX
  • Published a little earlier today, CIBC were noting that the 17.00 mark continues to offer a strong support for USD/MXN across the early part of Monday, as markets await local CPI data this week.
  • The confirmation of a downward trend in core prices, as stated by the majority of the board, should be enough to push Banxico to start its easing cycle in March, according to CIBC.
  • They prefer to reflect Banxico’s imminent decoupling from the Fed via a long BRL/MXN position with a 3.63 target. This idea also capitalizes on potential spikes in USD/MXN volatility ahead of elections in the US and Mexico, and neutralizes any pain from being short carry (as long USD/MXN would).

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.