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ASIA

Coming up in the Asia-Pac session on Wednesday:

USDCAD TECHS

Corrective Pullback

US TSYS

Risk-On Carries On

US EURODLR OPTIONS

Late Trade, March Calls

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  • The latest downtick in equity indices, likely linked to the headlines relating to the Billionaire's Tax in the US not being dead, prompting an extension of recent USDMXN strength to the best levels of the week above 20.30. Tomorrow's US GDP data likely to be the primary piece of event risk before domestic growth figures are published on Friday.
    • The 100-day MA, now residing at 20.1208 appears to be limiting MXN strength over the past few sessions. Firm short-term resistance is not until 20.5975, Oct 15 high.
    • Pressure on MXN has seen similar pressure on front-end TIIE swap rates and a flatter curve. The front end of the curve has risen by between 4-8bps, whereas the long end has fallen around 8-9bps.
  • Limited price movement across the region today with USDBRL close to unchanged ahead of the Copom decision later tonight. The DI curve is marginally lower, with profit taking likely in play ahead of tonight's decision.
  • USDCLP trading in similar fashion to USDBRL with no prime driver. Developments over the fourth pension withdrawal bill in the senate will be awaited and election concerns linger in the background.