Spiga

Spreads on Mexican Bonds Attractive

Always a currency risk, the more stable Mexican peso has invited higher risk astute investors a spread unlike that of its northern neighbor. CPI is running at about 4.4% and short term yields are running over 9%. GDP should be growing at about 3.88%. There is a current account deficit of 2% of GDP. The upcoming elections will no doubt add volatility to the market and the debt yields.

TAKE A LOOK AT THE YIELDS OF SHORT TERM MEXICO TREASURIES

There has been a 2.5% YTD gain in the Peso vs. Dollar. Rolling the ladder on the 28 day cetes minimizes that risk by almost a half for the yield. The dollar has been gaining some strength in global currencies so this could lead to higher risk

CHART OF MEXICAN PESO VS. DOLLAR

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