The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Mexico: Hit hard by US slump

On his recent state visit to the US, Mexican president Vicente Fox bathed in the warm glow of Mexico's new friendship with its northern neighbour. George W Bush tried out his Spanish and everyone else agreed that ever-closer economic ties between the two nations were the new future for Mexican economic growth.


But following the September 11 terrorist attacks on New York and Washington, Mexico is being hit hard by the US slump and Mexican companies are beginning to wonder if such a friendship with the US is worth having. The large industrial sector exports nearly 90% of its products to the US and slowing sales north of the border have been aggravated by a strong Mexican peso.


The Latin American corporate bonds market is not making life any easier. Markets were sent reeling in the immediate aftermath of the attacks, as much of the investor optimism that had been propping up the US economy was erased.


Corporate spreads on the JPMorgan Latin Eurobond Index (LEI) widened 190 basis points to 906bp over US treasuries from September 10 to September 28. More dramatically, Mexico's close links with the US meant the Mexican corporate sub-index on the LEI widened 207bp to 868bp over treasuries in the same period.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree