The link between oil and the Mexican peso is weakening. This has firms like BNP Paribas SA warning the nation’s bond market could suffer, bloomberg.com reports.
While Mexico’s fortunes have long been tied to the price of oil, that relationship has eroded as some investors sell the currency to hedge against global risks, including Britain’s possible exit from the European Union, said Banorte Ixe. So even as crude has climbed 7 percent since the end of April, the peso has plummeted 8 percent.
The slumping peso prompted BNP Paribas SA to say June 17 that there’s “considerable” risk that overseas holders of longer-term government bonds called Mbonos may begin to dump the securities. They’ve already chopped their holdings of short-term debt to the lowest since 2009 and an exodus from Mbonos would be a problem for Mexico because foreigners own 42 percent of them.
“People are throwing in the towel,” said Alvaro Vivanco, the head of local markets strategy at Banco Bilbao Vizcaya Argentaria SA. “A lot of real-money foreign investors are becoming frustrated with Mbonos because of the performance of the peso.”
more recommended stories
Mexico declares health emergency
Mexico declared a health emergency on.
Vila announces mandatory closure of ‘non-essential’ businesses in Yucatan -VIDEO-
The governor of Yucatan, Mauricio Vila,.
12 points to understand the health emergency in Mexico
The Ministry of Health reported, in.
The ninth edition of FILEY suspended due to Covid-19
Mérida, Yucatan (March 31, 2020).- In.
Sick British passenger allowed to disembark in Progreso
PROGRESO, YUCATAN (March 31, 2020).- A.
Campeche shopping centers close their doors due to pandemic
In addition to all the businesses.
How long does the economic impact of a pandemic last?
A study by the University of.
Mexico repatriates Yucatecan Ethel Trujillo who tested positive for COVID-19
The Government of Mexico, in a.
Mexican oil plunges to $10.37 USD per barrel
MEXICO (S&P) – It is the.
Plácido Domingo, once opera’s biggest star, has been hospitalized in Mexico with coronavirus
Plácido Domingo has been hospitalized in Mexico.