FX November 05, 2018 / 12:59 pm UTC

Mexico Flows: MXN Back to 20.10 on Negative Global Backdrop

By Priscila Robledo
Chart

MXN is losing ground along most EM peers and commodity prices, pressured by reduced hopes for an improved trade relation between the U.S. and China. Yesterday, white house adviser Larry Kudlow downplayed a potential deal with China by saying that "President Trump told me he would make a deal with China, but it has to be a deal that is strong and in America's interest". Kudlow's comments were followed by Chinese president Xi Jinoing speech denouncing a "winner takes all" attitude to international trade at the Shanghai trade fair, and showing no intention to meet President Trump demands. MXN is losing 0.45% to 20.1042.

Data-wise, only domestic vehicle sales and September leading indicator are in the agenda, though neither is considered top tier and we don't expect a significant market impact from the releases. There are no significant events in the U.S. either.

MXN is moving along with EMs, but the market remains pessimistic about the incoming government's policies. A hawkish Fed will put MXN back above 20.20.

4Cast Ltd. and all of its affiliates (Continuum Economics) do not conduct “investment research” as defined in the FCA Conduct of Business Sourcebook (COBS) section 12 nor do they provide “advice about securities” as defined in the Regulation of Investment Advisors by the U.S. SEC. Continuum Economics is not regulated by the SEC or by the FCA or by any other regulatory body. This research report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Nonetheless, Continuum Economics has an internal policy that prohibits “front-running” and that is designed to minimize the risk of receiving or misusing confidential or potentially material non-public information. The views and conclusions expressed here may be changed without notice. Continuum Economics, its partners and employees make no representation about the completeness or accuracy of the data, calculations, information or opinions contained in this report. This report may not be copied, redistributed or reproduced in part or whole without Continuum Economics’s express permission. Information contained in this report or relied upon in its construction may previously have been disclosed under a consulting agreement with one or more clients. The prices of securities referred to in the report may rise or fall and past performance and forecasts should not be treated as a reliable indicator of future performance or results. This report is not directed to you if Continuum Economics is barred from doing so in your jurisdiction. Nor is it an offer or solicitation to buy or sell securities or to enter into any investment transaction or use any investment service.
Analyst Certification
I, Priscila Robledo, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.