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
Former Merida bus station (CAME) to become a shopping center
The former Merida Bus Station (CAME).
Group of women sing “Las Mañanitas” to president López Obrador
President Andrés Manuel López Obrador turned.
Meet the Mexican girl with an IQ higher than Einstein’s
Mexico City.- At just eight years.
Swarm of 60 earthquakes shakes Mexicali and Southern California
A swarm of at least 60.
Italian ship attacked by pirates in Mexico leaving two injured
Pirates attacked an Italy-flagged offshore supply.
Campeche night sky filled with mysterious lights
CHAMPOTÓN, CAMPECHE (Times Media México) – On.
In addition to being a Magic Town, Bacalar is known for its exquisite cuisine
In Bacalar as in the rest.
First asphalt road with recycled plastic inaugurated in Guanajuato, Mexico
The first global road partially made.
Fake plastic surgeons plague the peninsula
YUCATÁN (Times Media Mexico) – The College.
Nicolas Maduro responds to Donald Trump: “We are ready go to battle”
President Donald Trump “gave the order.