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 Aerospace Fair features more than 600 exhibitors from over 40 countries
On Wednesday April 24th, president Andrés.
‘Narco parrot’ arrested in Brazil
A ‘narco parrot’ is under arrest.
Rotavirus cases in Yucatan on the rise
Symptoms include severe diarrhea, vomiting, fever,.
Dissolution of the Tourism Promotion Council is approved
CDMX (TYT Newsroom). – The House.
Today and tomorrow Yucatan will register the highest temperatures in the country
People are urged to take precautions.
Mexican company CEMEX will help rebuild Notre Dame
The company reported that it will.
Unemployment and inflation in Mexico -BANXICO-
Unemployment increases to 3.6% of the.
Works on new “Santa Lucía” Mexico airport to begin Monday April 29th: AMLO
Mexico City (AFP) – Work on.
Armed militia group that detained migrants kicked out of their New Mexico camp
EL PASO, Texas – Members of.
People with motor disabilities in Mérida now enjoy free public transportation
People with disabilities who live in.