Mexico Bond Yields Fall Before Central Bank Talk; Peso Declines

Mexico’s bonds rallied, pushing yields down for a second day, on speculation that policy makers tomorrow will give further signals that they’re prepared to reduce benchmark borrowing costs.

Yields on peso bonds due in 2024 fell four basis points, or 0.04 percentage point to 5.09 percent at 8:15 a.m. in Mexico City, according to data compiled by Bloomberg. The price rose 0.45 centavo to 143.67 centavos per peso. Yields touched a record low 5.06 percent on Feb. 6.

The central bank is scheduled tomorrow to give a quarterly inflation report detailing price trends and updating forecasts. The presentation will probably fuel speculation that policy makers are ready to cut the benchmark rate from a record low 4.5 percent, said Javier Belaunzaran, a money manager at Grupo Financiero Interacciones SA.

“We’ll be watching the quarterly inflation report tomorrow,” Belaunzaran said by phone from Mexico City. “They’re probably going to say that they don’t see inflationary risks.”

Mexico’s peso slipped 0.1 percent to 12.7503 per U.S. dollar today, trimming its advance to 0.8 percent in 2013.

The monetary authority on Jan. 18 held borrowing costs for a 32nd straight meeting.

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

To contact the editor responsible for this story: David Papadopoulos at

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