🗳️🇲🇽 MXN Front-End Hedging Demand Rises The Most Into Election: Cable FX Macro

• Mexican peso 1w implieds record the largest upside over the last week, the tenor is up 4.4 vols to 12.470%. Front-end hedging demand has risen every session since Wednesday as the peso plunged to levels shy of 17.0

• Despite the rise, implied volatility remains within this year's range. However, spot MXN is now trading in losses vs the dollar on a YTD basis. The peso had recorded gains above 4.0% YTD in early April

• The 1w volatility premium has risen to 315bps in favour of implieds, this is the highest since early February. Looking further, a Bloomberg model shows the peso may trade weaker over the next month, the analyst's consensus forecast sees the peso rising above 17.0 by July