Mexican Bonds Advance With Peso on Prospects for Economic Agenda

Mexico’s peso bonds rose, pushing yields down from a two-month high, on speculation legislators will pass legal changes to support economic growth.

Yields on the securities maturing in 2042 fell nine basis points, or 0.09 percentage point, to 7.59 percent at 10:58 a.m. in Mexico City, according to data compiled by Bloomberg. The yields climbed yesterday to 7.68 percent, the highest since Sept. 5. The peso rose 0.1 percent to 13.1984 per U.S. dollar.

Foreign holdings of Mexican government fixed-rate bonds climbed to a record last month on wagers that President Enrique Pena Nieto will prevail in his efforts to open up the energy industry. Mexico’s bonds fell over the past two days as U.S. jobs growth fueled speculation the Federal Reserve will curtail stimulus sooner than expected.

“Mexico seems very attractive,” Alejandro Urbina, who helps oversee $800 million at Silva Capital Management LLC, said in a telephone interview from Chicago. “We have to get over this taper panic that causes rates to shoot higher.”

Pena Nieto has pledged to end the state oil producer’s 75-year monopoly on drilling while seeking to lure companies such as Exxon Mobil Corp.

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.