Summary - MXN Steadies, Brazil Inflation

MEXICO - A full round trip saw USDMXN make new lows late Monday through 19.97 down to a low of 19.8985. We have since bounced back to 20.10 where the price action seems a lot more contained than yesterday. Mid-month inflation tomorrow will be the highlight.

A decision on whether Mexico will ban incoming flights from the U.K. will be made today.

Mexico central bank to announce auction results of:

• 5b pesos of 28-day Cetes, 9b pesos of 91-day Cetes, 13b pesos of 175-day Cetes, 9b pesos of 357-day Cetes
• 5.85b pesos of Mbonos due March 2026
• 550m udis of inflation-linked bonds due November 2028

BRAZIL - USDBRL spent the majority of the session grinding lower and erasing the gains from the open in line with the recovery in global risk sentiment and broad USD weakness, closing at 5.1273.

Mid-month inflation to be released at the top of the hour.

* Brazil Mid-Month IPCA Inflation –

• M/M expected at 1.17% vs a prior 0.81%.
• Y/Y expected at 4.35% vs a prior 4.22%.

- The Treasury argued that the *Brazil Cities expenses bill harms fiscal credibility and is against the Government agenda.