Expected strong 2Q and Amlo bounce positive for Mexico’s banks
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Expected strong 2Q and Amlo bounce positive for Mexico’s banks

Markets take Andrés Manuel López Obrador (Amlo) victory in stride; analysis shows Santander could outperform under next administration.


Amlo’s election success was expected, but stunning

The landslide victory of Amlo in the Mexican presidential election on July 1 didn’t lead to a negative impact on the financial markets, as some had predicted.

Assets have performed well and the Mexican banks – on something of a roll – should see these benign economic conditions continue.

Amlo’s success was expected, but stunning: he became the first presidential candidate to win a majority of the popular vote (53%) and, perhaps more important for governability, his coalition (Morena) won an outright majority in both houses of congress – almost two-thirds in the lower house.

However, markets have responded positively: the currency has strengthened against the dollar, the 10-year udibono yields have compressed and equities have rallied.


Rafael Elias,

Analysts such as Exotix’s Rafael Elias, who had predicted a widespread sell-off on a strong Amlo performance, believe the new president-elect’s swift change in tone has been the cause of the good market sentiment.

Amlo’s often-belligerent tone in the campaign has been transformed into one of conciliation and market-friendly comments, particularly in regards to fiscal prudence and maintaining the independence of the country’s central bank Banxico.

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