MBono Liquidity Tracker: Activity in MBonos continued at highs despite the recent fall
Liquidity in the MBono market, as measured by total trading volume, continues at highs despite decreasing in September. By type of investor, local banks’ liquidity was close to historical highs in 3Q24, and these investors are still the main participant in the MBono market. Meanwhile, foreign investors’ liquidity has been improving over the last quarters. Local pension funds’ liquidity remained volatile but above 2023 levels, while local mutual funds’ activity has moved slightly upwards in recent quarters. Finally, liquidity among other local investors has uptrended, albeit with volatility. As mentioned in our previous reports, liquidity could further improve as Banco de México is gradually cutting rates.
Udibono Liquidity Tracker: Liquidity fell as inflation is moderating
Liquidity in the Udibono market, as measured by trading volume, decreased in 3Q24. As inflation continues to moderate, appetite for real rates has also diminished. Local banks remained the most active player in the market, but their participation has decreased compared to 2023. Local pension funds and mutual funds’ activity has also decreased vs. previous years. In contrast, YtD foreigners and other local investors have increased their participation in the Udibono market. Going forward as inflation will continue to moderate, activity in Udis could decrease after years of higher activity.
Swaps trading volume: Liquidity in swaps remained on the upside
Swaps trading volume has maintained an uptrend this year. Most of the activity was in the IRS market, as participants have been actively trading monetary policy expectations. The volume will most likely remain high as the market moves to price in more rate cuts. Foreign investors have been behind the upward movement. Liquidity by maturity mostly focused on the 0-1Y section but also increased in the 2Y-4Y area compared to previous years.