The peso starts the session with an appreciation of 0.74% or 14.8 cents, trading around 19.75 pesos per dollar, touching a low of 19.7102 pesos per dollar.
This is the fifth session since December 8 that the exchange rate approaches, but does not pierce, the key support of 19.70 pesos, since at that level there is a strong increase in demand for dollars causing upward movements in parity peso-dollar.
Most currencies are gaining ground against the dollar in anticipation of more aggressive fiscal stimulus in the United States, due to the possibility that Democrats will win the two pending Senate seats that belong to the state of Georgia, giving the party control cash of Congress.
For now, Democrat Raphael Warnock, defeated Republican Kelly Loeffler according to preliminary results, while David Perdue and Jon Ossof continue to show very close results with a slight advantage for Democrat Ossof.
In the foreign exchange market, the dollar weighted index shows a 0.11% decline, touching a new low since February 16, 2018.
For its part, the yield rate on 10-year Treasury bonds rose to 1.03%, surpassing the 1% level for the first time since March last year, when the rate fell to a record low of 0.31% due to a higher demand for safe haven assets at the beginning of the pandemic.
This morning, the rate shows an increase of 5.5 basis points, standing at 1.01 percent.
The peso
There is optimism in the capital markets. In Europe, the main indices advance close to 0.94%, with the highest gains observed in the United Kingdom, where the FTSE 100 advanced 2.84 percent.
In the first three days of the year, the FTSE 100 accumulates a gain of 5.26 percent.
In the United States, the futures market shows that mixed results could be observed at the opening, with gains for issuers that are considered cyclical and losses for issuers in the technology sector.
In the commodity market, oil prices remain stable, with the WTI advancing close to 0.04% and trading at $ 49.95 per barrel, after hitting a maximum of $ 50.59 overnight, a level not seen since February 25. 2020.
The Fed and the elections
Today at 1:00 pm the Federal Reserve will publish the minutes corresponding to the monetary policy meeting of December 16.
For its part, Congress will meet today to certify the results of the Electoral College voting, which would be the last step in determining the triumph of the Democratic candidate Joe Biden for the presidency of the United States.
Regarding economic indicators, in the United States, the Automatic Data Processing (ADP) employment survey estimated that 123 thousand job positions were destroyed during December, the first decrease in employment since April and contrary to the market’s expectation of a new creation. of 88 thousand positions.
While, on Friday the non-agricultural payroll for the last month of 2020 will be published, where the creation of at least 80 thousand job positions is expected to be confirmed, which would be the lowest job creation since April when the destruction of 20.78 was confirmed. million job positions in that country.
Automotive industry
In Mexico, INEGI published the figures for public sales of light vehicles during December 2020, which show that during the month 105,135 units were sold in the domestic market, an increase of 10.1% compared to the previous month.
An increase was already anticipated during the month, since December is usually the month with the highest sales during the year.
Indicators of Banxico
However, with respect to December 2019, sales were 19.4% lower and the 105,135 units sold in the month represent the lowest figure for the same month since 2010. In all of 2020, a total of 949,353 units were sold, 28.0% less than in 2019 and the lowest figure since 2011.
During the session, the exchange rate is expected to trade between 19.66 and 19.99 pesos per dollar. The euro starts the session with an appreciation of 0.32%, trading at 1.2337 dollars per euro, while the pound loses 0.10% and is trading at 1.3613 dollars per pound.
Money market and debt
In the United States, the yield on 10-year Treasury bonds increased by 7.5 basis points, to 1.03%, while in Mexico the yield on 10-year M bonds remained unchanged at 5.51 percent.
Derivatives market
To hedge against a depreciation of the peso beyond 20.00 pesos per dollar, a purchase option (call), with an exercise date within 1 month has a premium of 1.98% and represents the right but not the obligation to buy dollars in the aforementioned level.
On the other hand, the interbank forward for sale is at 19.8252 at 1 month, 20.1640 at 6 months and 20.5710 pesos per dollar at one year.
Gabriela Siller; PhD
Director of Economic-Financial Analysis.
Banco BASE
