Banorte-Ixe FI/FX Strategy
Mexico
MXN 90 billion Cetes Extraordinary
Auction today
December 18, 2013
www.banorte.com
www.ixe.com.mx
 Banxico will offer Cetes in an extraordinary auction today from 1:30 to
2:00pm (EST)
Gabriel Casillas
 MXN 90 billion (US$ 7 billion) will be offered in two tranches: (1) 301day Cetes for MXN 40 billion (US$ 3.1 billion); and (2) 357-day Cetes
for MXN 50 billion (US$ 3.9 billion)
Alejandro Padilla
 We expect settlement rates of 3.67% for the 301-day instrument and
3.69% in the 357-day security
 The interest rate spread between Cetes and implicit forward rates in
the one- and three-month tenors are hovering around 30bps in both
maturities. Meanwhile, implicit real rates stand at -0.09% and -0.11%,
respectively
Chief Economist and Head of Research
[email protected]
Head Strategist - Fixed-Income and FX
[email protected]
Juan Carlos Alderete
FX Strategist
[email protected]
 Similar to previous extraordinary auctions, the main goal of the
offering is to withdraw excess liquidity generated by the maturity of
previously issued instruments and to mop some of the liquidity
generated by foreign investor positions in short-term Cetes
 We expect moderate demand given the increase in total supply along
the market’s consensus expectation that Banxico will keep the
reference rate unchanged in the foreseeable future
 Moreover, two additional factors could be negative for this particular
offering: (1) The cautious tone prevailing in the market ahead of
today’s FOMC meeting; and (2) seasonal decrease in liquidity as we
approach year-end

As of December 5, foreign investor holdings of Cetes total MXN 487
billion (US$ 37.5 billion), higher when compared to the MXN 461
billion (US$ 35.5 billion) of the previous month, and equivalent to
57.8% of the total amount outstanding
Document for distribution among
the general public
1
Cetes extraordinary auctions
Cetes (Days to
maturity)
Amount to be issued
(million pesos)
Expected Rate
Bid/Cover ratio
301
40,000*
3.67**
--
357
50,000*
3.69**
--
10-Dec-13
365
25000
3.66
1.80
11-Sep-13
343
26,200
3.72
2.0
4-Sep-13
350
30,000
4.04
2.0
19-Jun-13
49
5,145
3.85
0.1
181
25,000
4.00
2.0
321
25,000
4.07
3.2
182
40,500
4.06
2.3
364
70,000
4.14
1.5
182
24,760
4.30
2.1
Auction date
18-Dec-13
12-Jun-13
1-Apr-13
6-Feb-13
336
30,000
4.32
1.7
11-Dec-12
280
18,700
4.59
2.9
19-Sep-12
364
37,500
4.64
1.4
91
35,559
4.51
1.7
20-Jun-12
357
50,000
4.61
1.3
13-Jun-12
294
50,000
4.56
2.1
2-May-12
336
60,500
4.59
2.3
98
50,000
4.48
1.6
7-Mar-12
336
54,760
4.60
2.6
09-Dec-11
364
18,700
4.58
2.5
21-Sep-11
364
37,500
4.53
2.3
266
72,500
4.72
2.7
322
60,500
4.80
2.1
182
37,500
4.67
4.7
350
32,260
4.95
2.0
15-Jun-11
23-Mar-11
Source: Banxico
*Target amount to be issued
**Expected rate, Banorte-Ixe
Disclaimer
The information contained in this document is illustrative and informative so it should not be
considered as an advice and/or recommendation of any kind. BANORTE is not part of any party or
political trend.
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Track of the latest fixed-income trade recommendations (12 months)
Trade idea
Entry
Target
Stop-loss
Closed
Status
P/L
Initial date
End date
Long Mbono Jun'16
Receive 6-month TIIE-IRS (6x1)
4.47%
3.83%
3.90%
3.65%
4.67%
4.00%
4.06%
3.81%
Closed
Closed
Profit
Profit
7-Jun-13
10-Oct-13
21-Nov-13
25-Oct-13
Receive 1-year TIIE-IRS (13x1)
Long Udibono Dec'17
3.85%
1.13%
3.55%
0.95%
4.00%
1.28%
3.85%
1.35%
Closed
Closed
Flat
Loss
10-Oct-13
9-Aug-13
25-Oct-13
10-Sep-13
Receive 9-month TIIE-IRS (9x1)
Spread TIIE-Libor (10-year)
4.50%
390bps
4.32%
365bps
4.65%
410bps
4.31%
412bps
Closed
Closed
Profit
Loss
21-Jun-13
7-Jun-13
12-Jul-13
11-Jun-13
Receive 1-year TIIE-IRS (13x1)
Long Udibono Jun'22
4.22%
1.40%
4.00%
1.20%
4.30%
1.55%
4.30%
0.97%
Closed
Closed
Loss
Profit
19-Apr-13
15-Mar-13
31-May-13
3-May-13
Receive 1-year TIIE-IRS (13x1)
Long Mbono Nov'42
4.60%
6.22%
4.45%
5.97%
4.70%
6.40%
4.45%
5.89%
Closed
Closed
Profit
Profit
1-Feb-13
1-Feb-13
7-Mar-13
7-Mar-13
Long Udibono Dec'13
Receive 1-year TIIE-IRS (13x1)
1.21%
4.87%
0.80%
4.70%
1.40%
5.00%
1.40%
4.69%
Closed
Closed
Loss
Profit
1-Feb-13
11-Jan-13
15-Apr-13
24-Jan-13
Receive TIIE Pay Mbono (10-year)
Spread TIIE-Libor (10-year)
46bps
410bps
35bps
385bps
54bps
430bps
54bps
342bps
Closed
Closed
Loss
Profit
19-Oct-12
21-Sep-13
8-Mar-13
8-Mar-13
Long Udibono Dec'12
Long Udibono Dec'13
+0.97%
+1.06%
-1.50%
0.90%
+1.20%
+1.35%
-6.50%
0.90%
Closed
Closed
Profit
Profit
1-May-12
1-May-12
27-Nov-12
14-Dec-12
3
GRUPO FINANCIERO BANORTE S.A.B. de C.V.
Research and Strategy
Gabriel Casillas Olvera
Chief Economist and Head of Research
[email protected]
(55) 4433 - 4695
Economic Analysis
Delia María Paredes Mier
Katia Celina Goya Ostos
Alejandro Cervantes Llamas
Julia Elena Baca Negrete
Livia Honsel
Miguel Alejandro Calvo
Dominguez
Lourdes Calvo Fernández
Raquel Vázquez Godinez
Julieta Alvarez Espinosa
Executive Director of Economic Analysis
Senior Global Economist
Economist, Mexico
Economist, U.S.
Economist, Europe
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
(55) 5268 - 1694
(55) 1670 - 1821
(55) 1670 - 2972
(55) 1670 - 2221
(55) 1670 - 1883
Economist, Regional & Sectorial
[email protected]
(55) 1670 - 2220
Analyst (Edition)
Assistant
Assistant
[email protected]
[email protected]
[email protected]
(55) 1103 - 4000 x 2611
(55) 1670 - 2967
(55) 5268 - 1613
Fixed income and FX Strategy
Alejandro Padilla Santana
Juan Carlos Alderete Macal
Head Strategist – Fixed income and FX
FX Strategist
[email protected]
[email protected]
(55) 1103 - 4043
(55) 1103 - 4046
Equity Strategy
Manuel Jiménez Zaldivar
Victor Hugo Cortes Castro
Marissa Garza Ostos
Marisol Huerta Mondragón
José Itzamna Espitia Hernández
María de la Paz Orozco García
Senior Equity Research Analyst Telecommunications / Media
Equity Research Analyst
Senior Equity Research Analyst – Financials/
Mining/ Chemistry
Equity Research Analyst – Food/Beverages
Equity Research Analyst – Airports /
Infrastructure / Fibras
Analyst
[email protected]
(55) 5004 - 1275
[email protected]
(55) 5004 - 1231
[email protected]
(55) 5004 - 1179
[email protected]
(55) 5268 - 9927
[email protected]
(55) 5004 - 5144
[email protected]
(55) 5268 - 9962
Corporate Debt
Tania Abdul Massih Jacobo
Hugo Armando Gómez Solís
Idalia Yanira Céspedes Jaén
Senior Corporate Debt Analyst
Analyst, Corporate Debt
Analyst, Corporate Debt
[email protected]
[email protected]
[email protected]
(55) 5004 - 1405
(55) 5004 - 1340
(55) 5268 - 9937
Marcos Ramírez Miguel
Luis Pietrini Sheridan
Armando Rodal Espinosa
Head of Wholesale Banking
Managing Director – Private Banking
Managing Director – Corporate Banking
[email protected]
[email protected]
[email protected]
(55) 5268 - 1659
(55) 5004 - 1453
(81) 8319 - 6895
Victor Antonio Roldan Ferrer
Managing Director – Transactional Banking
[email protected]
(55) 5004 - 1454
Managing Director – Government Banking
[email protected]
(55) 5268 - 1683
Managing Director – Asset Management
[email protected]
(55) 5268 - 9004
Wholesale Banking
Carlos Eduardo Martinez
Gonzalez
René Gerardo Pimentel Ibarrola
4