A couple of months ago, we took a look at the Chilean sovereign bond market and indices. This time, we will analyze the case of Mexico, starting with the local bond market, followed by its structure, and ending with its index performance. Mexican domestic sovereign debt is issued by the Ministry of Finance (Secretaría de…
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In an environment of increasing rates, Mexico has not been left behind. As seen in my last blog, since December 2015, Mexico’s Central Bank (Banxico) has increased the reference rate by 375 bps, with the last 25 bps being a surprise for analysts and the market on May 19, 2017. I remember the days when…
100 days…is it a milestone? Is it a key number? I’m not sure, but everybody looks like they love to write about it, so I will too. What I know is in Mexico we have a saying that goes, “If the U.S. sneezes, Mexico gets a cold.” Following Dennis Badlyans’s post “Does the Outperformance of…
Since the U.S. presidential election on Nov. 8, 2016, the S&P/BMV Sovereign UDIBONOS Bond Index, which seeks to track inflation-protected Mexican government bonds, outperformed its nominal counterpart, the S&P/BMV Sovereign MBONOS Bond Index (see Exhibit 1). What was the driver behind this outperformance, and can we expect it to persist? Exhibit 1: S&P Mexico Sovereign…
In January, foreign investors rotated positions back into UDIBonos, adding about 1.2% market share—a significant allocation to this investor base. Flows into government bonds as a whole remain muted—in net, foreign investors withdrew about MXN 9 billion over the same period. (CETES: decreased MXN 32 billion; MBonos: increased MXN 7 billion). January inflation surprised analysts…
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