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Mexican Peso Bonds Snap Two-Day Slump on U.S. Housing Data

Mexican peso bonds snapped a two- day slump and followed Treasuries higher, pushing yields down, as U.S. data showed sales of previously owned houses unexpectedly fell in Mexico’s biggest export market.

The yield on the peso bonds due in 2024 fell one basis point to 6.56 percent at 3 p.m. in Mexico City, according to data compiled by Bloomberg. The price rose 0.06 centavo to 129.60 centavos per peso.

“It had do in part with the housing data,” said Alejandro Padilla, a debt strategist in Mexico City at Grupo Financiero Banorte-Ixe. “There are going to be more buyers in the market” with yields near 6.60 percent, he said.

Purchases of previously owned U.S. houses dropped 0.9 percent in February to a 4.59 million annual rate from a revised 4.63 million pace in January that was the highest since May 2010, a report from National Association of Realtors showed today in Washington. The median forecast among analysts surveyed by Bloomberg was for a rise to 4.61 million.

The 20-day correlation coefficient between 10-year Treasuries and Mexican bonds rose to 0.54 on March 16, the highest since Sept. 14, according to data compiled by Bloomberg.

The peso fell 0.4 percent to 12.7066 per U.S. dollar, from 12.6502 yesterday. The currency has gained 9.7 percent this year.

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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