Mexican government bonds fell, pushing yields to their highest level in almost four months, as speculation that the Federal Reserve will curtail a stimulus program diminished the Latin American country’s prospects.
Mexican short-term bonds rose, with yields approaching record lows, on mounting speculation that slowing growth will prompt the central bank to cut the target lending rate further this year from a record low 4 percent.
Mexico’s short-term bond yields fell to record lows as speculation mounted that policy makers may reduce benchmark borrowing costs later this year as the peso posts the biggest rally among major currencies.
Mexico’s central bank kept its benchmark interest rate unchanged for a tenth straight meeting as policy makers noted that domestic demand has been weak and the peso faced volatility stemming from Europe’s debt crisis.
Mexico’s central bank will probably keep its benchmark interest rate unchanged for a ninth straight meeting as inflation stays under control and policy makers evaluate the fallout from the European debt crisis.