US Mexico Immigration Agreement Boosts Sentiment At The Open

US-Mexico Immigration Agreement Boosts Sentiment At The Open | MXN, SPX

Over the weekend headlines poured in that US and Mexico had reached a deal with curb migration, allowing Mexico to avoid the 5% tariffs threatened by Trump. Still, the tariffs have been “indefinitely suspended” and sceptics were quick to point out the deal merely repackaged concessions already made by Mexico in previous negotiations.

Although details remain unclear, Trump claims “strong measures” will be taken by Mexico to stop migration at the southern border. And late on Sunday Trump has added that Mexico will make large agricultural purchases from the US.

Markets have taken it as a constructive step forward which has provided a sense of risk-on at the start of the Asian session. S&P Futures gapped up to 1-month high, equities across Asia were in the black, USD/JPY spent a brief period above last week’s high, USD is currently the strongest major whilst CHF and JPY are currently the weakest.

Of course, the biggest beneficiary so far today has been the Mexican peso which recouped a large chunk of losses it sustained when Trump announced the surprise tariffs. Currently trading -1.7% on the session after gapping lower at the open, USD/MXN is on track for its most bearish day since July 2018. After failing to hold above the March high, USD/MXN is back within range with potential to revisit $19 in light of recent developments and soft wage growth within Friday’s NFP data.

Index futures popped higher at the open, although the S&P500 futures markets appears set to close its gap. Still, equity prices are now being supported by a lift in trade sentiment following the US-Mexico announcement, and rising expectations of a Fed cut following Friday’s NFP data set.

Resistance has been found around 2,900 yet we expect the index to remain supported as bulls seek to buy the dips. The S&P has posted a solid 6% rally from tis low and price action has broken easily back above the 200 and 50-day eMA’s. Furthermore, the 20-day eMA is curling higher and could cross back above the 50, and the two averages currently provide a dynamic support zone around 2,840.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.