Mexico GDP Falls for First Time in 3 Years on Slower Services

08/22/16 Bloomberg

peso by Guanatos GwynMexico’s economy contracted 0.2 percent in the second quarter from the prior three months, less than calculated last month, as growth in the services industry slowed and exports fell.

Gross domestic product shrank 0.2 percent, according to a report from the national statistics institute Monday, the first drop in three years. Preliminary figures on July 29 had shown a 0.3 percent decline. From the previous year, GDP climbed 2.5 percent, compared with the 2.4 percent median estimate of economists surveyed by Bloomberg.

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Donald Trump’s Poll Numbers Move Markets—in Mexico

08/13/16 The Wall Street Journal 

peso by Guanatos GwynMEXICO CITY—Mexican-peso traders long used to watching out for anything from oil prices to U.S. payrolls now have one more thing to consider: polls showing who is ahead in the race for the White House.

A spate of recent surveys showing Democratic candidate Hillary Clinton ahead of Republican Donald Trump coincided with the peso reaching its strongest level against the U.S. dollar since the end of June, when the Bank of Mexico raised interest rates by an unexpected half-percentage point. A number of traders and analysts said those polls contributed to the peso’s gains.

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It’s Getting Harder and More Expensive to Make Cars in Mexico

08/14/16 The Wall Street Journal 

Industrial PlantCIUDAD JUÁREZ, Mexico—When car companies began flocking to this border town more than two decades ago, the big lure was labor, which was plentiful and inexpensive.

Today, with an auto-production boom in high gear, those advantages are being chipped away.

Toyota Motor Corp., BMW AG, Ford Motor Co. and several other auto makers have committed to spend a combined $15.8 billion to build new assembly plants or expand existing factories. That is on top of the more than a dozen plants already in operation and billions more being spent by auto-parts suppliers to keep pace.

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Mexico Leaves Rate Steady as Peso Recovers From Brexit Swoon

08/11/16 Bloomberg

mexican pesosMexico’s central bank kept its key interest rate unchanged, saying that a half point increase in borrowing costs in June is helping to curb inflation risks.

Banco de Mexico led by Governor Agustin Carstens held its overnight rate at 4.25 percent Thursday, a move predicted by all but one of 28 economists surveyed by Bloomberg. One analyst had forecast a 50 basis-point increase. Thursday’s decision follows the rate hike on June 30 that came amid market turmoil over the U.K.’s vote to leave the European Union.

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Demand drives $3bn Mexico bond deal at record rate

08/09/16 Financial Times 

pesomexicanoMexico sold nearly $3bn of debt on Monday at record low rates, as emerging market portfolio managers seek to put billions of dollars that have flowed into the asset class to work.

Orders for the two-part US dollar bond deal surpassed $9bn as Mexico readied to refinance debts coming due early next year with lower cost paper, according to four people familiar with sale

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Mexico sets guidance on two-part US dollar bond

08/06/16 Reuters

Mexican pesoNEW YORK, Aug 8 (IFR) – Mexico tightened pricing on a two-part US dollar bond on Monday, as demand for the deal swelled close to US$9bn, according to one of the lead managers.

The sovereign set guidance of Treasuries plus 150bp area on a tap of its 4.125% January 2026s and 210bp area on a new long 30-year maturing in January 2047, with area at plus or minus 5bp.

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Mexican Peso’s Slide Having ‘Minor’ Impact on CPI, Sanchez Says

08/05/16 Bloomberg

pesoDespite the Mexican peso’s plunge, its impact on driving up inflation is minor as the central bank has worked to keep consumer prices in check, deputy Banxico Governor Manuel Sanchez said.

During an interview in Los Angeles, Sanchez, who analysts consider among the most hawkish members on Banco de Mexico’s board, played down the risks of pass-through from the currency to inflation and instead alluded to the central bank’s credibility and interest rate decisions as limiting risks to inflation.

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