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Summary 1/3 - Perfect Storm For MXN

LATAM

A perfect storm yesterday and this morning sees USDMXN firmly back under 20.00 roughly 2% off highs made just yesterday. Clear driver was the delay of the contentious Banxico Bill. To recap:


Initial headlines:

  • Mexican lawmaker Says ruling party open to change Banxico bill.
  • Changes may include removing, capping Banxico obligation.

This was followed up by Senate Majority Leader Monreal:

  • Mexico ruling party suggests Banxico bill debate in Jan.
  • Debate would lead to reworked Banxico bill in February.

Lawmaker Laura Rojas confirmed the postponement. USDMXN was a touch heavy into the announcement but traded quickly down from 20.06 to 19.90 and has continued to trade lower this morning amid a softer US dollar and improved risk sentiment.

Today 10:30am Local: Central bank to offer 30b pesos of Cetes maturing in 91 to 658 days.

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