Background on Cetes and Banxico
Certificados de la Tesorería de la Federación, or Cetes, are interest-bearing securities issued by the Mexican government to finance its public debt. The Bank of Mexico (Banxico) is the country’s central bank, responsible for implementing monetary policy and maintaining price stability. Banxico’s recent policy meeting has direct implications for Cetes yields.
Recent Developments in Cetes Yields
This week, yields on Cetes have continued their downward trend, aligning with expectations of a less aggressive monetary policy approach as the year progresses.
- Cetes 28-day: The yield dropped to 7.19%, a marginal decrease of 0.01 percentage points. The amount issued was 7,000 million pesos, with demand reaching 2.44 times the amount offered.
- Cetes 91-day: The yield fell to 7.47%, a decrease of 0.03 percentage points from the previous emission. Demand was 3.34 times the amount issued, which was also 7,000 million pesos.
- Cetes 181-day: The yield decreased to 7.55%, a drop of 0.02 percentage points from the last emission, with demand at 2.86 times the amount offered (14,300 million pesos).
- Cetes 350-day: The yield went down by 0.07 percentage points to 7.63%, with demand reaching 2.96 times the amount issued (14,000 million pesos).
Banxico’s Monetary Policy Meeting Impact
Following the recent monetary policy meeting, Banxico’s governing board reduced the reference rate by 25 basis points, setting the benchmark interest rate at 7.50%.
Analysts from Monex Casa de Bolsa anticipate further reductions in the reference rate, expecting it to conclude the year at 7%.
Key Questions and Answers
- What are Cetes? Cetes, or Certificados de la Tesorería de la Federación, are interest-bearing securities issued by the Mexican government to finance its public debt.
- Who is Banxico? The Bank of Mexico (Banxico) is the country’s central bank, responsible for implementing monetary policy and maintaining price stability.
- What happened in the recent Banxico policy meeting? In the latest monetary policy meeting, Banxico’s governing board reduced the reference rate by 25 basis points, setting it at 7.50%.
- How have Cetes yields been affected? Following the policy meeting, Cetes yields have been declining consistently across various maturities (28-day, 91-day, 181-day, and 350-day).
- What do analysts predict for the reference rate? Analysts from Monex Casa de Bolsa expect further reductions in the reference rate, anticipating it to end the year at 7%.
