The peso begins the session with an appreciation of 0.64% or 12.8 cents, trading around 19.78 pesos per dollar, after the exchange rate touched a minimum level overnight of 19.7158 pesos.

The Mexican peso is the fifteenth most appreciated currency this morning, while the dollar weighted index loses 0.45%, reaching its lowest level since February 16, 2018.

The appreciation of the peso is due to a weakening of the dollar against most of its main crosses, due to a greater appetite for risk in global financial markets related to the global economic recovery with the vaccination process against SARS-COV-2 .

Metals also start the session with gains, given the general weakening of the dollar, which makes commodities more accessible to investors who have other currencies.

Given this, gold starts the year breaking the resistance of $ 1,900 per ounce, to trade at $ 1,938.41, showing an increase in its price of 1.09%, while the price of silver increases by 4.13% to $ 27.4904 per ounce .

For its part, platinum starts the session trading at 1,111.41, which is equivalent to an increase of 3.67% and touched a price of 1,113.09 dollars per ounce, not seen since August 2015.

Likewise, nickel is trading at $ 17,485 per metric ton, which is equivalent to a 5.25% increase in its price, while the price of copper increases 2.15% and is trading at $ 7,915.50 per metric ton.

The peso

In the capital markets, broad gains are observed in Europe, with the main indices advancing on average 1.32%, with the biggest gain being the London FTSE 100, with an advance of 2.71 percent.

In the futures market, the three main indices of the United States advance close to 0.50%, so it is highly probable that they will simultaneously reach new all-time highs in the first session of the year.

For their part, the prices of the main oil blends began the session with mixed results, with the WTI trading at $ 48.35 per barrel, which is equivalent to a reduction in its price of 0.35%, while the price of brent increased 0.12 % and is trading at $ 51.86 per barrel.

The mixed results are given, because, although there is optimism, market participants remain awaiting the decision of OPEC and its allies, on January 10.

It should be mentioned that the WTI reached a maximum of $ 49.83 per barrel, a price not seen since February 2020, while the brent reached a maximum of $ 53.33 not seen since March 2020.

Manufacture

Another factor contributing to the optimism of the markets was the publication of the manufacturing PMI indicators in several countries.

In China, Caixin’s PMI for manufacturing stood at 53 points in December, showing a slowdown compared to November, which stood at 54.9 units, but solidly above the 50-point threshold that divides the expansion from the contraction in manufacturing. .

In Japan the indicator stood at 50 points, after being below the threshold for 19 consecutive months.

The Eurozone manufacturing PMI indicator stood at 55.2 points in December slightly below the preliminary estimate of 55.5, although above the reading of 53.8 in November.

By country, Germany is the one that registers the highest growth in the manufacturing industry with 58.3 points, a maximum in the last 34 months.

It should be remembered that Germany is the economic engine of Europe and the data shows that manufacturing activity continued despite the most recent outbreak of coronavirus cases in Europe.

Jobs

In Mexico, on Saturday the president announced that during December 277,000 formal jobs registered with the IMSS were lost, which in the year confirms the destruction of about 646,900 job positions in the IMSS registry. The precise data is expected to be released the following weekend.

For comparison purposes, in 2009 171,713 job positions were lost, while in 1995, 611,200 job positions were lost in the IMSS records, being evidence of the serious economic crisis that Mexico went through and the slow recovery that is being observed.

Indicators of Banxico

During the session, the exchange rate is expected to trade between 19.70 and 19.90 pesos per dollar. The euro starts the session with an appreciation of 0.66%, trading at 1.2296 dollars per euro, while the pound loses 0.31% and is trading at 1.3629 dollars per pound.

Money market and debt

In the United States, the yield on 10-year Treasury bonds increases by 1.3 basis points, to 0.93%, while in Mexico the yield on 10-year M bonds increases by 1.7 basis points, at a rate of 5.56 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 2.06% premium 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 19.8348 at 1 month, 20.17475 at 6 months and 20.6002 pesos per dollar at one year.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE