CEO’s Executive Summary:

Four developments in Mexico over the past few weeks stand out for their importance for economic and political stability and for U.S.-Mexico relations. First is the release of the 2021 budget, which has very important implications for investors despite its ultimately unsurprising content. Second is the economy, noting that investors should take the highly positive economic numbers we expect to see during the fall with a grain of salt. In addition, recent policy changes suggest that the energy sector will be an additional drag on growth. Third is President Andrés Manuel López Obrador’s (AMLO) proposal for a referendum to put five past presidents on trial in a blatantly political move. Fourth is the conflict in northern Mexico over water flows from the Boquilla Dam, which has the potential to escalate in violence and impact both the upcoming U.S. presidential election as well as Mexico’s mid-term election next June.

Full Newsletter: Monarch News – September 29, 2020

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