Wall Street's Love for Mexican Bonds Tempered by Hedging Costs
- Foreign holdings of Mbonos slide to lowest in six months
- Meanwhile, Morgan Stanley bets on a rally of local bonds
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Some of the largest Wall Street firms are betting on a rally of Mexican local bonds. Not everyone is heeding the advice.
Foreign holdings of peso-denominated government debt have dropped to an almost six-month low of 62 percent after surging to the highest level on record in March, according to Mexico’s central bank data through May 25. Meanwhile, a surge in costs to protect traders’ profits is curbing their appetite for the so-called Mbonos.