Overview

• The 28-day Cete yield climbed 0.28 percentage points to 7.47%, the highest since early August, with a MXN 7,000 million placement drawing 2.14 times coverage, below the prior auction.
• Shorter and longer tenors moved marginally: 91-day at 7.44% (−0.03) with 3.35× demand, 174-day at 7.48% (−0.07) with 3.84×, and 693-day at 7.85% (−0.04) with 3.25×.
• All current Cete maturities yield above the 3.74% annual inflation rate, delivering positive real returns for conservative investors.
• Banxico has lowered its policy rate by 250 basis points this year to 7.50%, a cycle that has moderated demand for government bills relative to the two-year average.
• Analysts surveyed by Citi expect another 25 bp cut this month, while Banorte and Monex see Cetes demand strengthening toward year-end to above 2.2× as Mexico’s rate premium and anticipated Fed easing support flows.