December 28, 2010 / 4:58 PM / 7 years ago

Mexico's 1-month Cetes yield seen down to 4.35 pct

 MEXICO CITY, Dec 28 (Reuters) - The yield on Mexico's
benchmark one-month Cetes was expected to edge lower at
Tuesday's auction as Mexico's central bank was seen holding
rates steady throughout next year after a tame inflation
report.
 Traders also say yields could fall after the market soaked
up a bigger offer than normal last week when the central bank
held a special auction on Dec. 22 aimed at soaking up liquidity
ahead of government debt payments.
 The yield on the 28-day Cetes, or T-bills, was seen at 4.35
percent, 3 basis points lower than the last regular auction on
Dec. 21, according to the average forecast of 10 dealers
surveyed by Reuters.
 Many economists expect Mexico's central bank to keep its
benchmark interest rate at 4.5 percent through 2011 to support
a weak recovery from recession. A report last week showing weak
inflation in early December supported that view.
[ID:nN23131124]
 Yields on longer-term Cetes were expected to fall, with the
three-month T-bill yield seen 2 basis points lower at 4.59
percent.
 The six-month T-bill yield was seen dropping 9 basis points
to 4.72 percent.
 Mexico's 20-year bond yield was seen at 7.73 percent, up 44
basis points from its previous auction on Nov. 16.
 TERM     PREVIOUS         THIS WEEK'S      EXPECTED
            RATE (DEC 21)    SURVEY          CHANGE
           (pct)             (pct)
  28-DAY       4.38      28-DAY  4.35          - 3 bps
  91-DAY       4.61      91-DAY  4.59          - 2 bps
 175-DAY       4.81     182-DAY  4.72          - 9 bps
 (Reporting by Lorena Segura; Editing by Leslie Adler)


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