Articles tagged by Mexico
The Mexican peso is expected to underperform
most of its peers in the emerging markets, according to a survey of FX
corporate and sales executives, traders and strategists attending Bloomberg’s
FX16 Symposium found.
Out of more than 120 respondents, some
Profit & Loss talks
to staff at Bull and Bear, a trader training centre located in Mexico City, about
their plans to promote FX trading in Mexico.
“Our mission is to form the biggest active traders community
in Mexico by offering ...
Edgewater Markets is expanding its LatAm business with the launch of a local matching engine in Mexico City.
The deployment of the server in the KIO-5 data centre in Mexico, which recently went live in Q3 2016, enables customers to cross connect directly to Edgewater’s local environment. It will support a range of currency pairs, with a strong focus on MXN crosses.
“We are constantly looking for ways to grow our business and to penetrate into new areas of the market and we identified order management as a gap in our offering. We have clients aggressing rates on our platform very actively, but we were lacking on order capability.
The Mexican peso dropped to a new low against the US dollar on Wednesday, in anticipation of the policies likely to be pursued under a Trump administration in the US.
MXN fell more than 2% against the USD, hitting 21.619, breaking the previous record low of 21.3952 that was set three days after Trump’s election victory on November 8.
As part of Trump’s election campaign, he has called for an overhaul of the North American Free Trade Agreement (NAFTA) and subsequently USD/MXN was often watched as a proxy on the election result during the presidential campaign and could be seen to fluctuate around the highly publicised presidential debates.
The Banco de Mexico (Banxico) has announced that it will offer FX hedging instruments to the market for up to US$20 billion, a move that led to a bounce in the peso and has gained approval from some local economists.
Banxico’s Foreign Exchange Commission (FEC) did not specify the exact details of the instruments that will be offered, stating that the first auction will take place on March 6 for up to US$1 billion and will be settled in Mexican pesos.
Uncertainty regarding both financial conditions within Mexico and geopolitical developments internationally is making it hard to predict how the peso will fare in 2017.
Speaking at Profit & Loss Latin America, which took place on February 9 in Mexico City, economic experts warned that there are numerous variables that could impact the value of the Mexican currency this year, making accurate forecasts challenging.
“Uncertainty will be the name of the game this year,” explained Daniela Blancas, a financial market economist at CitiBanamex.
Galen Stops looks at the drivers behind the appreciation of the Mexican peso and asks whether the rally can continue.
Few, if any, saw this coming.
After Donald Trump won the US presidential race in November 2016, USD/MXN went from 18.03 up to 20.89, and by the time of his inauguration in January 2017, the exchange rate was up to 21.58.
This depreciation of the peso seemed eminently reasonable at the time, given that on the campaign trail Trump had promised to renegotiate the North American Free Trade Agreement (Nafta) in America’s favour or terminate the agreement altogether, not to mention building a border wall between the US and Mexico at the latter’s expense.
The North American Free Trade Agreement (NAFTA) is the top macroeconomic issue that will affect the Mexican peso this year, according to the results of a Bloomberg foreign exchange survey announced today.
After polling more than 100 financial professionals in Mexico, Bloomberg found that 46% said that NAFTA is the macroeconomic factor that will have the biggest impact on the peso.
Meanwhile, 34% of attendees said that the peso would be most affected by the presidential election on July 1.
A new survey from Bloomberg suggests that authorities in Mexico may face an uphill struggle when promoting the FX Global Code of Conduct amongst the local market.
In the survey, which Bloomberg says more than 100 financial professionals in Mexico participated in, 39% of respondents said that they will not endorse the Code. This is in comparison to 40% who said that they are reviewing the Code, 8% who said they have signed the letter of commitment to the Code’s principles and 12% that said they have implemented Code training.
"What the survey results tell us is that many people still do not understand what the FX Global Code of Conduct is and does," said Mariana Suarez, Bloomberg's Head of Sales for Mexico and Central America.
In an interview at Profit & Loss Latin America 2018 conference, Gary Flagler, Head of International Business Development, Derivatives, at MexDer, talked about the Mexican exchange’s future growth plans.
Profit & Loss: What's been your focus since you joined the exchange last year?
Gary Flagler: We can sum up our international initiative in one word and three parts, and that word is: Connectivity.
When I talk about connectivity, I'm talking about connectivity to international clients, whether they're professional trading groups, hedge funds, commodity trading advisors, asset managers and, to a lesser extent, banks, corporates, mutual funds, pension funds and retail.
Although cryptocurrencies have become too big for institutional investors to ignore, there are still significant barriers deterring them from entering the crypto space, said speakers at Profit & Loss’ 2018 Latin America conference in Mexico City.
Speaking on a panel at the event, Michael Moro, the CEO of Genesis Trading, argued that a lot of traditional financial services firms were caught out by both the popularity and the longevity of crypto-assets.
“I believe that – especially in the US – that the major institutions got caught. I don't believe they ever wanted to deal in cryptos, they thought it was a fad or a ponzi scheme and were waiting for the bubble to burst and the whole thing to go away.
Banco Monex has joined as a CLS settlement member, becoming the 70th firm to assume the status.
“I could not be more pleased to welcome Banco Monex as the first Mexican bank to participate directly in our settlement service,” says David Puth, CEO of CLS.
“Participation in CLS Settlement continues to grow, and our settlement members, such as Banco Monex, play a critical role in ensuring market participants have access to the highest standard of risk mitigation to support their trading operations and enable us to deliver a safer and more stable FX market. We look forward to continued growth in the Mexican market.”
Mauricio Naranjo, CEO of Grupo Financiero Monex adds, “Joining CLS as a member with direct participation in the CLS settlement service is an important milestone for Banco Monex. The Mexican peso is the most actively traded currency in the Latin American region and mitigating settlement risk is a key priority for many institutions. Participation within the CLS ecosystem will enable us to achieve this goal for our operations and through time for our clients as third parties, while significantly enhancing liquidity efficiencies for the Mexican market.”
LCH has obtained recognition as a central counterparty from the Banco de México.
The recognition for LCH’s SwapClear Service is effective from 22 June 2018 and provides a greater choice of CCPs to those participants affected by the Mexican clearing mandate.
With this recognition, LCH can expand clearing to Mexican-domiciled market participants to support their interest rate derivatives trading activity.
LCH will continue to offer clearing to global participants for Mexican Peso-denominated interest rate derivatives as one of the 21 currencies offered by SwapClear. LCH clears for members and their clients based in 55 countries.
LCH is now actively clearing trades on behalf of a Mexico-domiciled participant.
BBVA Bancomer completed a cleared Mexican peso denominated TIIE interest rate swap, with BBVA SA Madrid acting as the clearing broker.
The transaction marks the first time a Mexican participant has used LCH SwapClear, following LCH’s recognition as a Foreign Central Counterparty (CCP) by Banco de México earlier this month.
John Horkan, LCH Group COO and head of North America, says: “We’re excited that BBVA Bancomer has become the first Mexican participant to clear its interest rate derivatives at SwapClear. This milestone swiftly follows LCH’s recent recognition as a Foreign CCP by Banco de México, allowing Mexican entities the benefit of accessing the global liquidity available in SwapClear.”
Edgewater Markets recently hosted an event in Lima, Peru, to celebrate the continued roll out of its new LatamFX.Pro platform. Galen Stops attended the event and sat down with the firm’s senior management to discuss why they’re making such a strong push in Latin America.
n a nutshell, the central thesis behind Edgewater Market’s Latam strategy is that their technology can be used to convert the NDF market into an NDF trading platform and thereby enabling local market participants to aggregate, consume and distribute FX rates more efficiently.
Carlos Mosquera Benatuil, the CEO of Mexico-based Solidus Group, which focuses on digital finance through its crypto hedge fund, Solidus Capital, and crypto OTC desk, Solidus Markets, talks to Profit & Loss about why cryptoassets are more than just a vehicle for speculation in Latin America.
Profit & Loss: What are some of the key differences you see between crypto trading in Latam compared to the US?
Carlos Mosquera Benatuil: So there are only a few places for cryptoasset price discovery in Latam, but the bigger exchanges are pretty good. The market still lacks sophisticated traders, however, which has actually been a challenge for us as we’re looking to hire staff for the proprietary trading desk that we’re building out.