Bill Gross Bets Big on Mexico Months After Slashing Bond Holding

07/25/2016 Bloomberg 

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Photo Credit: Bloomberg

Billionaire bond fund manager Bill Gross is rekindling his love of Mexico.

 

The nation’s inflation-linked notes maturing in 2025 were among the top five holdings in Gross’s $1.5 billion Janus Global Unconstrained Bond Fund as of June 30, according to the fund’s website. Just three months earlier, he’d unloaded all of his Mexican government debt, marking what appeared to be a significant shift in his investment strategy after he’d spent years touting the country’s financial assets.

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BMW moves forward with new plant in Mexico

17/06/2016 USA Today

BMW has started construction of a new factory in Mexico, becoming the latest automaker to head south of the border.

The BMW Group’s new facility, estimated to be ready for production in 2019, will be located in San Luis Potosi, an area that’s home to several auto plants from various makers. Construction began Thursday with a groundbreaking ceremony. It will be building the BMW’s best-selling car line, the BMW 3 Series, and is expected to meet a production capacity of up to 150,000 cars per year. The BMW Group is investing around $1 billion in the plant, which is expected to create 1,500 new jobs.

BMW adds to the growing number of automotive jobs that have migrated to Mexico over the past decade. Mexico has seen a 40% increase in auto jobs from 2008 to 2014, according to the Center for Automotive Research. The U.S. has only seen a 15% increase in the same period.

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Mexican Peso Hit by Risks From Brexit to Trump

06/14/2016 The Wall Street Journal

pesomexicanoMEXICO CITY—Mexico’s peso slid Tuesday to its weakest level against the U.S. dollar since February, moving toward the record lows that prompted the central bank earlier this year to raise interest rates and intervene directly in the foreign exchange market.

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Mexican government sees gold, silver production down in 2016

4/8/16 Reuters

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Mexico expects gold and silver production this year to drop while copper output will be flat as low prices continue to weigh on the sector, the government’s top mining official said in an interview.

Mario Cantu, the economy ministry’s general mining coordinator, said gold output this year is estimated to reach about 120,000 kilograms, or down nearly 4 percent compared to production of 124,581 kg in 2015.

Silver production is expected to fall in 2016 by more than 6 percent compared to last year, to reach 5,245 tonnes.

Meanwhile, copper output is seen flat this year at about 540,000 tonnes, compared to production of 540,468 tonnes in 2015. (Reporting by David Alire Garcia)

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How an Overlooked Impact of Mexico’s Drug Violence is Holding Back its Economy

3/19/16 Business Insider

The war on drugs that has raged across Mexico over the past decade has led to the deaths and disappearances of hundreds of thousands of people.

The human costs of the drug war and related violence are well known, but the chilling effect on Mexico’s economic vitality has been harder to measure.

Recent research has shown that high levels of violence in Mexico — like the 7.6% increase in homicide rate the country experienced in 2015 — not only have a negative impact on workers, but also prevent complex economic activities from starting and growing.

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Will Mexico’s Economy Finally Start To Grow In 2016?

2/29/2016 Forbes

A few weeks ago I walked with Carlos Salcido, a 50-year-old executive at luxury retailer Palacio de Hierro through the company’s flagship department store in Polanco, one of Mexico City’s wealthiest neighborhoods. Salcido strolled passed well dressed parents and younger customers in private school uniforms and pointed out the in-store boutiques from brands such as Hermes and Tiffany. “Polanco isn’t just the heart of Mexico City, it’s the heart of Mexico. Many brands will have their flagship Mexico or Latin American store here,” he told me. Palacio de Hierro recently made a $300 million investment in its Polanco store and is betting big on Mexico’s luxury market. “In the last 20 years, we’ve had double digit growth every year. We can see luxury growing and growing,” Salcido told me. Overall, despite concerns about a drop in the peso’s value and rock bottom oil prices, Salcido is optimistic about Mexico’s economy. “The top [income bracket] is growing but you have a middle class that is earning more and starting to come in,” he explained.

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Mexico Institute Resources on the U.S.-Mexico High Level Economic Dialogue

Vice President Joe Biden and several other high-level U.S. officials are traveling to Mexico for the third meeting of the U.S.-Mexico High Level Economic Dialogue, which will take place in Mexico City on February 25, 2016. The U.S.-Mexico High Level Economic Dialogue (HLED) was created by Presidents Barack Obama and Enrique Peña Nieto in May 2013, in order to advance strategic economic and commercial priorities that are central to promoting regional economic growth, job creation, and global competitiveness for Mexico and the United States. The HLED meets annually at the cabinet level, and builds on and promotes sustained progress in a range of existing successful bilateral dialogues and working groups.

In a recent interview on NPR’s Marketplace, Director Duncan Wood suggested the meeting would address the Trans Pacific Partnership, including its potential impact on will U.S.-Mexico trade, and how lower energy prices are affecting the economies and competitiveness of the region. The Mexico Institute is pleased to share with you several recent articles regarding U.S.-Mexico economic relations published ahead of the HLED.

Related Material

The United States and Mexico: Building and Designing Things Together
In this article on Forbes.com, former U.S. Ambassador to Mexico and current Wilson Center Public Policy Fellow E. Anthony Wayne joins former Under Secretary for North America of Mexico’s Foreign Ministry and current UNAM Professor Sergio Alcocer to write about U.S.-Mexico trade and the agenda items for the High Level Economic Dialogue.

Depressed Energy Prices Cause Decline in U.S.-Mexico Trade
Deputy Director Christopher Wilson writes about the impact of low energy prices on U.S.-Mexico trade in this post on the Mexico Institute Forbes blog.

The “Bridge to Nowhere” Now Connects the United States and Mexico
On February 4, 2016, Mexican President Enrique Peña Nieto and U.S. Secretaries of Homeland Security and Commerce inaugurated a new border crossing just south of El Paso, Texas and Ciudad Juárez, Chihuahua. Ambassador E. Anthony Wayne and Deputy Director Christopher Wilson discuss this in their op-ed on Forbes.com.

North American Needs to Pivot…to North America
In this U.S. election year, it is important to shift the conversation to the importance of U.S. relations with Mexico and Canada. This column, by the former Canadian ambassador to the U.S., the former Mexican ambassador to the U.S., and the former U.S. ambassador to Mexico, suggests that all three nations increase their focus on advancing trilateral economic relations and improve collaboration on major security issues including illegal trafficking, extremism, and terrorism. This article appeared in The World Post, The Globe and Mail, and El Universal.