The peso closed the session with a depreciation of 1.31% or 26.9 cents, trading around 20.85 pesos per dollar, with the exchange rate touching a minimum of 20.5396 and a maximum of 20.8621 pesos per dollar.

The depreciation of the peso occurred alongside a general strengthening of the US dollar against most of its main crosses, with the weighted index advancing 0.62%, the largest increase since March 4.

In general, the preference for dollars was associated with a greater perception of risk in global financial markets, after Germany announced the implementation of strict containment measures during spring break, due to an increase in the number of coronavirus cases.

It should be noted that the downward trend in the number of daily cases of coronavirus in the United States has also slowed, raising the expectation of a possible third wave of infections.

In the bond market, the yield rate of the 10-year Treasury bonds showed a decline of 7.4 basis points, standing at 1.62%, the result of a higher demand for risk-free instruments.

The peso

In contrast, in the capital market, losses were observed.

The Dow Jones lost 0.94%, the S&P 500 lost 0.76% and the Nasdaq lost 1.12 percent.

Most capital markets also closed with losses in Europe and Asia.

In the raw materials market, prices also fell, mainly energy, given the risk that the coronavirus will affect the demand for fuels again.

The foregoing led WTI and Brent to close trading at 57.48 and 60.44 dollars per barrel, which is equivalent to contractions of 6.63 and 6.47%, respectively.

It is important to note that, in the bond market, the interest rates of government securities in circulation had significant increases for emerging economies.

In the case of Mexico, the 10-year M bond rate rose 12 basis points to 6.79%, while the 20-year M bond rate rose close to 20 basis points to 7.59%, the highest daily increase since April 20, 2020.

This was probably driven by the results of the 20-year M bond auction, whose rate was 7.35%, that is, 90 basis points above the last auction of the same instrument in February.

Interest rate

The increases in interest rates on longer-term bonds are probably associated with an upward adjustment of inflation expectations in Mexico.

Likewise, there is the risk of capital outflows, as some central banks have begun to consider normalizing their monetary policy, while in Mexico it is still being discussed whether to keep the interest rate unchanged or cut it by 25 basis points.

The monetary policy announcement is scheduled for this Thursday at 1:00 p.m.

In the session, the euro touched a low of 1.1842 and a high of 1.1941 dollars per euro.

Finally, the euro peso touched a minimum of 24.3874 and a maximum of 24.7890 pesos per euro.

At the close, the interbank quotes for sale stood at 20.8475 pesos per dollar, 1.3755 dollars per pound and 1.1849 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE