Mexican Bonds Climb With Peso on Yellen’s Support for StimulusJonathan Levin
Mexico’s benchmark bonds rallied, pushing yields down the most in three weeks, as Janet Yellen, the nominee for U.S. Federal Reserve chairman, said she’ll ensure monetary stimulus isn’t removed too soon.
Yields on peso bonds due in 2024 fell six basis points, or 0.06 percentage point, to 6.24 percent at 4 p.m. in Mexico City, according to data compiled by Bloomberg. The price increased 0.53 centavo to 129.97 centavos per peso. The peso appreciated 0.4 percent to 12.9647 per dollar.
Bonds rose as Yellen said in testimony before a Senate committee that she will sustain the central bank’s unprecedented stimulus until she sees improvement in the economy. Mexico sends about 80 percent of its exports to the U.S., and foreign investors have poured into the Latin American nation’s bonds as the Fed’s asset-buying program compressed Treasury yields.
Mexico’s debt securities are benefiting from “an environment of better risk appetite due to the expectations of a possible delay in tapering,” Alejandro Padilla, a strategist at Grupo Financiero Banorte SAB in Mexico City, wrote today in an e-mailed research note to clients.