The correlation between Mexican peso bonds and U.S. Treasuries is rising to a two-month high as an improving U.S. labor outlook fuels speculation the Federal Reserve will raise interest rates next year.
The correlation between Mexico’s peso debt and U.S. Treasuries is nearing a 10-month low as speculation the Federal Reserve will reduce bond purchases at the current pace reduces volatility in emerging-market assets.
Brazil’s industrial production in December fell by the most in five years, surprising analysts, as the central bank continues to boost interest rates in the world’s second-biggest emerging market. Swap rates fell.
The dollar had the biggest weekly drop against the yen in almost three months as U.S. payrolls rose less than forecast in December, fueling concern the Federal Reserve will slow reduction in bond-buying.
Mexico’s peso rose the most in a month as slower-than-forecast U.S. job growth eased concern the Federal Reserve will move quickly to cut asset purchases that have fueled demand for the Latin American country’s debt.