[MXN Rally Presses On, Re-enter MXN Shorts Around 19.00/19.20 Sep 13, 2024]
The great Mexican peso rally continues with USD tailwinds and weak hands fueling the move. Flows on the desk continue to skew towards net better buying from hedge fund names. With September only halfway over and local risks remaining, 19.00/19.20 looks like a great area to re-enter MXN shorts. TIIE rallied aggressively on Friday, but in FX swaps the front-end basis remains well supported from RHS flow in the 2m and 3m tenors. I expect these to reprice lower into quarter-end once the market has digested the flow.
-UBS Strategy
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