Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

We discuss the bearish flattening of Mexico's rates curve ahead of the monetary policy meeting tomorrow and argue that the flattening should continue.The attached file is a snapshot of EM 10y rates market, which we produce daily, and where we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to the broad market.

We discuss the bearish flattening of Mexico's rates curve ahead of the monetary policy meeting tomorrow and argue that the flattening should continue.The attached file is a snapshot of EM 10y rates market, which we produce daily, and where we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to the broad market.

Rates 10y Dashboard: Mexico’s Curve Has Started to Bearish Flatten

In this week’s Alpha Bites, we recommend a 5s10s flattener in Mexico. From here, either the sell-off in global rates curtails or, if it continues, then eventually in the case of Mexico it raises outflow risks, pressuring the currency and flattening the curve with the short-end pricing in rate hikes. We recommend keeping a paying bias given that the risks are currently tilted towards the sell-off continuing.

In this week’s Alpha Bites, we recommend a 5s10s flattener in Mexico. From here, either the sell-off in global rates curtails or, if it continues, then eventually in the case of Mexico it raises outflow risks, pressuring the currency and flattening the curve with the short-end pricing in rate hikes. We recommend keeping a paying bias given that the risks are currently tilted towards the sell-off continuing.

Alpha Bites: Mexico 5s10s Flattener with Paying Bias

Mexico

A vanila interest rate swap us an agreement between two counterparties to exchange cashflows (fixed vs floating) in the same currency. This agreement is often used by counterparties to change their fixed cashflows to floating or vice versa. The payments are made during the life of the swap in the frequency that is pre-established by the counterparties.

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MXN 5Y (MPSW5E CURNCY)

Rates 10y Dashboard: Mexico’s Curve Has Started to Bearish Flatten

We discuss the bearish flattening of Mexico's rates curve ahead of the monetary policy meeting tomorrow and argue that the flattening should continue.

Gautam Jain, PhD, CFA

Alpha Bites: Mexico 5s10s Flattener with Paying Bias

In this week’s Alpha Bites, we recommend a 5s10s flattener in Mexico but with a paying bias given the risk of a further sell-off and steepening of...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)