Mexico Bonds, Peso Sink on Portugal as Consumer Confidence Drops

Mexico’s local bonds fell, pushing yields up by the most in a week, as doubts about the stability of Portugal’s government and weaker consumer confidence domestically pared demand for the debt and the peso.

Yields on peso-denominated debt due in December 2024 rose seven basis points, or 0.07 percentage point, to 5.78 percent at 9:57 a.m. in Mexico City, according to data compiled by Bloomberg. The peso depreciated for a third day, slipping 0.2 percent to 13.0733 per dollar.

Emerging-market currencies, stocks and bonds fell today amid concern that the resignation of two government ministers in Portugal may derail attempts to implement austerity measures. Mexico’s national statistics agency reported today that consumer confidence in June fell to the lowest level since December 2011.

“The market is just being cautious given the news out of Europe earlier today and the holiday in the U.S. tomorrow,” Vivienne Taberer, a money manager at Investec Asset Management, said in an e-mailed response to questions. “The weaker Mexican consumer confidence number is also contributing.”

Markets in the U.S., Mexico’s biggest trading partner, will be closed tomorrow for that country’s Independence Day celebration.

To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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