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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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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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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Short Sellers Pile Into Mexico as It Lands in U.S. Crossfire

08/01/16 Bloomberg

An exchange-traded fund focused on the Latin American nation’s shares has the most bearish bets of any country, while hedge funds including Finisterre Capital in London are pouring into credit-default insurance on Mexican bonds. Societe Generale SA projects the peso will keep underperforming emerging-market peers as the country comes under attack in one of the most rancorous U.S. election campaigns in memory.

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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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Bank of Mexico Chief: Recent Big Rate Moves Don’t Set Precedent

07/08/16 The Wall Street Journal

380px-Agustin_CarstensMEXICO CITY—The Bank of Mexico’s decision to raise interest rates last month by half a percentage point doesn’t mean that the central bank will always move rates by that much, nor has it abandoned its focus on controlling inflation to one of managing the peso exchange rate, Gov. Agustín Carstens said Friday.

The central bank surprised investors on June 30 by raising interest rates by a half point, beating expectations and matching a similar increase in February. That prompted speculation that this aggressive stance could become the norm in coming months to support a weak and volatile peso.

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