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📝No News Is Good News In MXN: UBS Strategy

USDMXN traded heavy with some supply from Real Money and Hedge Fund names throughout the day. It's a case of no news is good news in MXN, and carry remains king. I remain in the camp of buying USDMXN dips, looking to trade the 18.30/18.80 range. TIIE rallied around 12bp in the back end with tailwinds from core yields. Funding continues to trade poorly, with TN implying again north of 12%. Basis broadly ticked higher, with 3m closing towards par and ly around -13. I've liked this trade, but with month-end approaching, my bias is to reduce some of the basis payer into a TIIE receiver.



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