What Are the Mexico Reforms Spooking Markets?

Mexico’s recent election has opened the door for constitutional changes sought by outgoing President Andres Manuel Lopez Obrador that would affect the judiciary and social programs. President-elect Claudia Sheinbaum — a protégé of AMLO, as the current president is known — must now decide which of the changes she will prioritize.

AMLO’s party fell short of winning a supermajority in congress in the June 2 election. But it gained a larger number of seats than expected, which could allow it to advance the reforms at a faster pace without having to make alterations requested by opposition parties. The potential for unchecked power — some investors are concerned about an erosion of checks and balances — has been roiling markets, sending the peso lower.