4 Jun 2015
Upside in Mexican assets - BBH
FXStreet (Guatemala) - Analyst at Brown Brothers Harriman explained, that from a market perspective, we still see upside for Mexican assets, especially on a relative basis within the EM space.
Key Quotes:
"The country’s macroeconomic management remains amongst the best with manageable budget and current account deficits."
"Despite a heavy reliance on the oil sector for its revenues, we think the government can make the necessary adjustments to limit the budgetary slippage."
"Moreover, we think that Mexico is in a good position to achieve a rebalancing of its economy away from energy and towards industrial exports. After all, it’s in a good neighborhood (as far as economic growth goes, at least)."
"And the recent depreciation of the peso has brought a substantial improvement in the country’s competitiveness. Mexico’s trade-weighted real exchange rate has weakened considerable when compared with, for example, China’s."
"Using the BIS methodology, the peso has depreciated about 8% against a 14% gain for the yuan over a one year period."
Key Quotes:
"The country’s macroeconomic management remains amongst the best with manageable budget and current account deficits."
"Despite a heavy reliance on the oil sector for its revenues, we think the government can make the necessary adjustments to limit the budgetary slippage."
"Moreover, we think that Mexico is in a good position to achieve a rebalancing of its economy away from energy and towards industrial exports. After all, it’s in a good neighborhood (as far as economic growth goes, at least)."
"And the recent depreciation of the peso has brought a substantial improvement in the country’s competitiveness. Mexico’s trade-weighted real exchange rate has weakened considerable when compared with, for example, China’s."
"Using the BIS methodology, the peso has depreciated about 8% against a 14% gain for the yuan over a one year period."