Mexican Bonds Gain on Prospects for Economic Agenda; Peso Rises

Mexico’s peso bonds rose, pushing yields down from a two-month high, on speculation lawmakers 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 4 p.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 0.3 percent to 13.1770 per U.S. dollar.

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

“The yields look interesting after the past couple of days,” Alejandro Urbina, who helps oversee $800 million at Silva Capital Management LLC, said in a telephone interview from Chicago. “For an investor who’s looking further down the road, they have a longer investment horizon and they’re considering what the impacts of the reforms may be on Mexico, that story is good.”

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.

The Finance Ministry today sold 4 billion pesos ($303 million) of bonds due in 2031 at auction. The government also auctioned off a total of 36.5 billion pesos in bills maturing in between one month and one year.

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