Rates continue to tumble.(Mexican interest rates)(Brief Article)(Statistical Data Included)

The downward trend in Mexican rates showed no signs of abating, with 28 day yields tumbling a further 40 basis points at this weeks Cetes auction, to 6.97%, the lowest level since their inception in 1982. Rates all along the curve mirrored this fall, with the 90-day yield falling 61 basis points to 7.97%, triggered by the new low inflation outlook, and easing of monetary policy by the Banco de Mexico. Demand was high with only 30% of bids for the 28-day paper being filled, pushing yields lower than most analysts had anticipated.

Following the Federal Reserve's decision to cut US rates by 25 basis point on Tuesday, bringing the Fed Funds rate down to 3.50%, there is now room for rates to fall further, which should help insulate the economy from a deeper slowdown, although this is dependant upon a stabilisation in the US economy.

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