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📝 Caution Into Illiquid MXN Rates Trading Next Week: UBS Strategy

USDMXN was stable once again, trading between 19.40 and 19.52. The market seemed to have low levels of interest. In forwards, thin trading ahead of a Monday holiday in Mexico. Basis in 1y widened substantially once again, and implied yields are well above 12% (which proved to be the area to fade last time the market saw these levels). While it looks attractive to start to receive rates at these levels in forwards, next week could be illiquid with the Mexico holiday Monday and with Thanksgiving markets in the U.S.

- UBS Strategy



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