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.
Investors in longer-dated bonds have already suffered losses of 4.2 percent this year in dollar terms, the worst in Latin America.
“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.”
Source: bloomberg.com
Comments
more recommended stories
U.S. negotiators set to make last-minute trip to Mexico to pin down USMCA dealWASHINGTON/MEXICO CITY (Reuters) – The Trump.
Walmart apologizes for selling “unusual” Christmas sweatersWalmart Canada apologized for selling a.
U.S. border arrests dropped again in November amid Trump crackdown on migrant crossersWASHINGTON (Reuters) – The Border Patrol.
Residents of Río Lagartos, Yucatan to receive free purified water for one yearResidents of the Rio Lagartos municipality,.
ue to lack of medication IMSS has to implement new innovative HIV treatmentThe Mexican Institute of Social Security.
Stone tables found in Chichen Itza reveal unknown information on the ancient MayaA recent finding recorded in Chichen.
Passenger dies on Interjet flight that had to emergency land in MéridaAn Interjet flight from Havana to.
Here’s how technology has completely transformed the sports industryThe growth of technology really has.
Picasso arrives in MéridaMERIDA Yucatan (Times Media Mexico) –.
423 Yucatan indigenous schools provide education in Maya languageIn Yucatan there are 423 indigenous.
Leave a Comment