Mexican Peso Bonds Drop for Fourth Day on U.S. Stimulus Outlook

Mexican peso bonds declined for a fourth straight day as U.S. service industry growth added to speculation that the Federal Reserve will keep curtailing monetary stimulus.

The securities maturing in 2024 slipped 0.22 centavo to 131.15 centavos per peso at 4 p.m. in Mexico City, according to data compiled by Bloomberg. The yield increased two basis point, or 0.02 percentage point, to 6 percent. The peso advanced 0.1 percent to 12.9218 per U.S. dollar, the biggest gainer among major Latin American currencies.

Government bonds fell along with Treasuries after the Institute for Supply Management reported that U.S. service providers expanded in May at the fastest pace in nine months. The Fed has reduced monthly debt purchases that have supported demand for emerging-market assets by $10 billion at each of its past four meetings.

U.S. 10-year Treasuries held at 2.6 percent today, the highest level on a closing basis since May 12.

“The market is very dependent on all the economic data,” Mario Copca, a currency and fixed-income strategist in Mexico City at Metanalisis SA, said in a telephone interview.

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

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Dennis Fitzgerald, Bradley Keoun

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