Halister News

(Bloomberg) -- The Mexican peso weakens in line with most Latam peers, while market impact from strongest earthquake in a century is seen as limited.

• MXN stays within 17.50-18.00 trading range
  • Overnight low at 17.7362 as peso sold off after reports of tremor; pared losses later
  • Currency and fixed-income markets are trading normally as of Friday morning, according to NY-based traders; earthquake will probably have minimal impact on financial markets
  • Temblor struck country’s less-developed southwest region and spared the capital city; nation’s biggest oil refinery isn’t damaged, Pemex says
• Citi favors local-currency bonds in select EM countries such as Russia and Mexico, where markets can price in more rate cuts
  • HSBC also expressed bullish view on EM local rates and maintained its long-duration bias via 10-year Mbonos early this week
• TIIE swap rates may extend drop after falling as much as 11bps on Thursday amid sinking U.S. yields and below-est August CPI
  • Traders are betting rates will decline further and more paying positions will probably be stopped out as prices move against them
• NOTE: George Lei is an FX strategist who writes for Bloomberg. The observations he makes are his own and not intended as investment advice.
• Some information comes from FX traders familiar with the transactions who asked not to be identified because they are not authorized to speak publicly

To contact the reporter on this story: George Lei in New York at glei3@bloomberg.net To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net Alec D.B. McCabe