The peso starts the session with little change, showing a moderate appreciation of 0.07% or 1.4 cents and trading around 19.87 pesos per dollar.
The exchange market shows a mixed performance, although the dollar weighted index shows a moderate strengthening of 0.06%, advancing for the second consecutive session.
The most depreciated currency this morning is the pound sterling, which loses 0.63% and is trading at 1.3296 dollars per pound, as a trade agreement with the European Union has not yet been finalized and in the week the Prime Minister of the United Kingdom will travel to Brussels to meet with the President of the European Commission.
Uncertainty also prevails in financial markets due to the fact that coronavirus cases continue to advance at a high rate in the United States, with nearly 200,000 new cases per day registered since December began.
In California alone, between 24 and 30 thousand new cases have been reported a day during the last two days, so it is expected that most of the state will maintain severe containment measures.
For its part, in France it is likely that the confinement measures will be extended towards the end of the year, when they were originally planned to end on December 15.
In Hong Kong, new restriction measures were announced, closing gyms and beauty salons, while restaurants will have to operate until 6:00 p.m. The measures will take effect from Thursday and will have an initial duration of 14 days.
The peso and stimuli in the United States
Finally, doubts have arisen about the approval of new fiscal stimuli in the United States.
Senate Republican Majority Leader Mitch McConnell has not supported the bipartisan $ 908 billion proposal, stopping approval of the package.
Within the Senate, there is already warning of the possibility of a recovery in the shape of a “W” which would mean another drop in economic activity, if a new stimulus is not approved.
In the capital markets of Europe, generalized losses are observed, on average close to 0.50% and in the United States the futures market points again to a decline of the main indices close to 0.35%.
In the raw materials market, losses are also observed for energy prices, with the WTI falling 0.81% and trading at 45.39 dollars per barrel.
Not all the news is negative this morning. Vaccination against Covid19 began today in the United Kingdom, becoming the first Western country to apply the vaccine.
The distribution of the doses will begin with the highest risk group, which includes people over 80 years of age, nursing home workers and some workers in the health sector. It is estimated that this first group is made up of approximately 6 million people, the one in charge of distributing the vaccine will be the National Health Service, funded by the state.
For its part, in the United States, a few moments ago it was announced that, according to a report by the United States Food and Drug Administration (FDA), the vaccine developed by Pfizer Inc. and BioNTech SE is highly effective in preventing Covid19 and there are no security issues that prevent authorization for its distribution for emergency purposes.
The government agency has not yet given authorization for the distribution of the vaccine in the United States, but it is highly likely that this will happen in the short term.
Indicators of Banxico
During the session, the exchange rate is expected to trade between 19.72 and 19.99 pesos per dollar. The euro starts the session with an appreciation of 0.14%, trading at 1.2126 dollars per euro, while the pound shows a depreciation of 0.09% and is trading at 1.3368 dollars per pound.
Money market and debt
In the United States, the 10-year Treasury bond yield remains unchanged at 0.92%, while in Mexico the 10-year M bond yield increases 0.5 basis points, at a rate of 5.68 percent.
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 1.91% 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 19.9223 at 1 month, 20.2498 at 6 months and 20.6720 pesos per dollar at one year.
Gabriela Siller; PhD
Director of Economic-Financial Analysis.