This Sunday’s election is Mexico City is a pre-cursor of what’s to come in 2018. If an anti-Trump candidate wins the state of Mexico this weekend, populism could swell up south of the border, and make NAFTA do-overs even harder.
The state’s gubernatorial race is an important barometer of Mexican politics this time around. Not only will it call NAFTA revisions into question, but it will set the near-term direction of the peso. The Mexican peso was clobbered when Trump was elected, sinking to over 22 to the dollar. It’s since recovered, but has been parked between 18.50 and 19.00 for weeks. Sunday will likely change all that.
The election is a major opportunity to test the popularity of Andres Manuel Lopez Obrador from the leftist party MORENA. AmLo is polling well for the 2018 presidential election, leading by around three points, according to Consulta Mitofsky. That election takes place next July.