USD/MXN extends its recent decline.....>

MEXICAN PESO: USD/MXN extends its recent decline having broken below multi-month

uptrendline support earlier this week as well as the 50-dma at 19.17111. Next

levels of support kick in at the Jan17/25 lows at 18.8783/8811. MXN is

outperforming the broader LatAM FX space, with BRL and CRC a close second.

- USD/MXN 1m risk reversals sit at fresh cycle lows today, hitting the lowest

levels of the year and lowest since late June 2018. The acutely low levels of

implied volatility across much of EMFX at present prompted UBS today to

recommend buying USD-EMFX call spreads, adding that call spreads bought at times

when EMFX volatility was low relative to economic growth perform well,

particularly against BRL, COP, MXN, RUB, ZAR, TRY and IDR.

- Note Brazil BCB rate decision due today: SELIC rate exp. unchanged at 6.50%.

First meeting under new CB head Neto and will come under pressure from weak

domestic data, potentially flattening the rate path.