Mexican Local Bonds Are a Bargain as Selloff Risk Seen Contained
- Ukraine war failed to spur massive capital flights from Mbonos
- Yield on 2031 peso-denominated note reached a three-year high
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Mexico’s beaten-up local bonds are starting to entice bargain hunters amid signs the Ukraine war failed to spur panic selling from foreign investors.
Peso-denominated notes are looking cheap as yields hover around multi-year highs, with bonds due 2031 are paying an almost 8.5% rate, the most since 2019, and bonds due 2042 yielding 8.63%, exactly what they were trading three years ago. The so-called Mbonos have been falling since early last year, as prospects of tighter global monetary conditions buoyed U.S. rates and hit appetite for developing-nation assets.