BNP Tells Traders to Exploit El Nino With Mexico Inflation Wager

With Mexico’s inflation rate sinking to a nine-year low this month, bond traders are naturally showing scant concern consumer prices will pick up any time soon.

That’s a mistake to BNP Paribas SA. It’s predicting El Nino -- a global weather pattern that typically causes droughts, wildfires and floods -- will reverse a slide in agricultural prices and boost the inflation rate in as little as six months. The Paris-based bank recommends investors bet on cost-of-living expectations rising in the bond market.