MEXICO FUND

Banxico’s survey of economists on May  2 has GDP falling to 2.26%, and inflation rising to 4.16%, meaning interest rate cuts likely on hold. ‘De-Risking’ from China seen as a long-term positive for Mexico. Mexico investors may be in for a volatile few weeks with the economy petering out even as inflation rises, casting serious doubts about interest rate cuts next week. Global investors who like the long-term view of Mexico may want to sit on the sidelines to see if the Mexican stock market tracks the macro trends of the country. The iShares MSCI Mexico (ARCA: EWW) ETF is up 12.45% over the last six months, clobbering large Latin American rival, the iShares MSCI Brazil (ARCA: EWZ), which rose just 2.45%.  But year-to-date shows the EWW ETF struggling, approaching zero percent growth since January. Mexico has the third highest interest rate in Latin America at 11%, only Colombia (11.75%) and Argentina (50%) or worse. Banxico did cut rates on March 21 by 25 basis points, but the May 9 monetary policy committee meeting is unlikely to cut rates now that inflation is rising again. Banxico Deputy Governor Jonathan Heath said during the International Monetary Fund meetings in Washington DC in ...Full story available on Benzinga.com

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