Mexico’s Bonds Advance With Peso as Emerging-Market Demand Rises

Mexico’s peso bonds gained for a fourth straight day and the currency strengthened as the government sold bonds at a weekly auction amid revived demand for emerging-market assets worldwide.

Yields on fixed-rate securities due in 2018 fell five basis points, or 0.05 percentage point, to 5.22 percent today in Mexico City, the lowest closing level since Dec. 23, according to data compiled by Bloomberg. The peso advanced 0.8 percent to 13.2572 per dollar, the most among the greenback’s major Latin American counterparts.

The peso climbed along with most emerging-market currencies as the outlook for developing-nation assets improved after India unexpectedly raised borrowing cost and traders speculated that Turkey would follow with an increase. Mexico’s government sold 10.5 billion pesos ($796 million) of debt due in 2018 today to yield 5.21 percent,

“Demand was good,” Agustin Villarreal, a fixed-income and foreign-exchange director at Grupo Financiero Invex SA in Mexico City, said in an e-mailed response to questions. There’s a “better sentiment in emerging markets,”

The bid-to-cover ratio, a measure of demand, for the 2018 bonds was 2.58. The central bank said the Finance Ministry also sold 800 million udis ($309 million) in inflation-linked bonds due in 2022. The government auctioned off 29 billion pesos in notes maturing in six-months or less.

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