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Snapshot: USDMXN Retests 20.00, TIIE Curve Bear Steepening

MEXICO
  • Weaker equities and oil prices have fuelled the turnaround in the Mexican peso which is now retesting 20.00 which broke to the downside on Thursday 15th April. Risk off sentiment has seen the Bloomberg dollar index inch higher throughout the US session and in line with peso losses the TIIE curve is seen bear steeper.
  • Domestically, the hydrocarbon bill has been dispatched from the senate commission to the floor and will be debated and voted on in the coming days.
  • Regarding data, markets will focus on on mid-month inflation due Thursday. Continued dovish rhetoric from the central bank in their latest minutes provide an interesting backdrop in the approach to the next rate decision on May 13th.
    • USDMXN up 0.83% at 19.9832
    • BRLMXN up 0.56% at 3.592
    • Bbg Dollar Index up 0.26% at 1132.74
    • JPMorgan EM Ccy Index down 0.42% at 56.838
    • S&P E-Mini Future down 40 points (-0.96%) at 4115.75
    • WTI Crude Oil (front-month) down $0.94 (-1.48%) at $62.44
    • Mex Bolsa up 407 points (0.85%) at 48260
  • Mexico TIIE Swaps:
    • 1-yr +5 bps at 4.56%
    • 2-yr +7 bps at 4.91%
    • 5-yr +10 bps at 5.83%
    • 10-yr +13 bps at 6.68%

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