Incoming Mexican government has little room for error: adviser

11/16/2018 – Reuters

REUTERS/Henry Romero

NEW YORK (Reuters) – An adviser to Mexican president-elect Andres Manuel Lopez Obrador sought on Thursday to reassure investors in New York, following weeks of upheaval in Mexican financial markets and doubts about the policies of the incoming left-leaning government.

Abel Hibert, an economic adviser to Lopez Obrador, acknowledged that financial markets were watching closely.

“We recognize that we have one opportunity to show responsibility in the elaboration of the next budget,” Hibert said to a crowd of investors at a business forum in New York.

“The design of the public budget will be very careful,” he said. “We don’t have room for mistakes.”

Markets were shook in recent weeks by announcements from the incoming administration that it would cancel a partly-built $13 billion Mexico City airport and limit bank commissions.

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Mexico central bank sends warning over incoming leftist government

11/16/2018 – Reuters

Photo by Negative Space on Pexels.com

MEXICO CITY (Reuters) – Mexico’s central bank raised its benchmark interest rate on Thursday on concerns over inflation, and said the incoming government’s policies risked fanning inflation in a strongly worded warning to President-elect Andres Manuel Lopez Obrador.

The bank said another rate hike was possible.

The Bank of Mexico lifted its overnight interbank rate MXCBIR=ECI by 25 basis points to a nearly 10-year high of 8.0 percent, as expected by economists. It was a divided decision, with one member calling for a 50-point hike.

Mexico’s peso and the stock market have been rattled by concerns Lopez Obrador’s administration will move away from the orthodox fiscal policies advocated by the central bank.

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Mexico Seen Hiking Interest Rate After AMLO Spurs Peso Plunge

11/15/2018 – Bloomberg

By Eric Martin

Mexico’s central bank will raise its key interest rate Thursday after President-elect Andres Manuel Lopez Obrador’s decision to cancel a $13 billion airport sent the peso plunging and raised concerns about policy uncertainty, according to a survey of economists.

Policy makers led by Governor Alejandro Diaz de Leon are projected to lift borrowing costs, already at the highest level in almost a decade, another quarter point to 8 percent, according to the median estimate in a Bloomberg survey. Twenty-one economists see policy makers raising the rate, with six projecting it to remain unchanged.

Analysts began to forecast an increase two weeks ago after AMLO, as the leftist is known, said he would cancel construction of the new Mexico City airport already one third complete, spurring the biggest sell-off in the nation’s assets since 2016. While the central bank kept the rate unchanged last month, the board warned that it will take the actions needed to ensure its price goal is reached, and one of the five members voted for a hike.

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RPT-Elon Musk’s ‘Teslaquila’ drink faces clash with Mexican tequila industry

11/14/2018 – Reuters

Reuters/Carlos Jasso

MEXICO CITY, Nov 13 (Reuters) – Tesla Inc co-founder Elon Musk and Mexico’s tequila producers could be headed for a collision after the agave-based drink’s industry group opposed the flamboyant billionaire’s efforts to trademark an alcoholic drink dubbed “Teslaquila.”

One of the world’s richest people and chief executive of Tesla, Musk is known for ambitious and cutting-edge projects ranging from auto electrification and rocket-building to high-speed transit tunnels.

Now it seems that Musk could be setting his sights on disrupting the multibillion-dollar tequila industry.

On Oct. 12, he tweeted “Teslaquila coming soon” and an accompanying “visual approximation” of a red and white label with the Tesla logo and a caption that stated “100 percent Puro de Agave.”

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AMLO Shockwaves Spread for Mexico Investors Wary of Policies

11/09/2018 – Bloomberg

By Eric Martin

Mexican President-elect Andres Manuel Lopez Obrador and his allies are quickly showing that they’ll put the people over business interests — even if it risks jarring investors.

The country’s stocks, bonds and currency plunged Thursday after the Senate leader for Lopez Obrador’s Morena Party introduced a bill to eliminate certain fees and commissions charged by banks. While such a move would be welcome in many corners of the country, it came as a surprise to a business community that was already reeling from the president-elect’s decision 11 days ago to scrap a $13 billion airport project.

The politician known as AMLO has always somewhat unnerved investors with his leftist agenda, but the latest actions by him and his party have left them wary of what comes next. After taking smiling photographs with executives in the first four months of his presidential transition, Lopez Obrador in the past two weeks has challenged them like no other leader in recent memory.

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BBVA shares stumble on fee limit proposal in Mexico

11/09/2018 – Reuters

MADRID, Nov 9 (Reuters) – Shares in Spanish bank BBVA fell on Friday after a senator from the Mexican president-elect’s party unexpectedly proposed stopping banks from charging certain commissions, deepening fears about the leftist’s economic policy.

BBVA has been relying on Mexico, which is its biggest market and accounts for 41 percent of its overall profits, to offset worsening economic conditions in Turkey and an ongoing squeeze on lending activity in Spain.

“Incoming president (Andres Manuel Lopez) Obrador had previously indicated a more business-friendly approach than the market initially feared, but this proposal will likely increase jitters once more that his policies may prove more interventionist in nature,” Jefferies said in a note.

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Mexican Inflation Slowed Modestly in October

11/08/2018 – The Wall Street Journal

By Anthony Harrup

MEXICO CITY — Mexico’s consumer-price inflation eased slightly in October as a drop in agricultural prices partially offset higher energy costs, but left the annual rate well above the central bank’s 3% target.

The consumer price index rose 0.52% last month, pushing annual inflation down to 4.9% from 5.02% in September, the National Statistics Institute said Thursday.

Core CPI rose 0.31%, led by a 0.39% increase in services, nudging the annual rate up to 3.73% from 3.67% in September.

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