1- USD Swap market (fixed for float). Float leg pays 3MLibor quarterly, act360. Fixed Leg pays annually, act360. Market is trading mid at 1.125%.
2- TIIE market. Fixed for float Swap. Float leg pays TIIE4W every 4weeks, act360. Fixed leg pays annually, act360. Market is trading mid at 4.25
3- 3MLibor vs 12MLibor USD basis swap. 3ML quarterly, act360 is exchanged for 12MLibor+S, annual, act360. The market for the spread is at mid -0.625%
4- XC Basis swap. 4WTIIE, paid every 4weeks vs 12MLibor+S. The spread S market is 1.
5- Spot FX, MXNUSD trading at 0.0505, Settlement T+0.
Q :You sell USDMXN 1Y fwd at mid: lay out the transactions needed to hedge the 1Y USDMXN fwd showing direction, tenor
Assuming you can borrow/lend at 3MLibor
How to approach this problem?