Mexico country-specific exchange traded fund surged, with the Mexican benchmark index returning the most in almost two years and the peso rallying, after the FBI said it will not recommend criminal charges against Democrat Hillary Clinton.
The iShares MSCI Mexico Capped ETF (NYSEArca: EWW) surged 5.3% on Monday, jumping back above its 50- and 200-day simple moving averages. EWW, which is exposed to currency fluctuations, also strengthened on the 1.8% rebound in the peso currency against the U.S. dollar.
Meanwhile, the benchmark Mexican Stock Exchange Mexican Bolsa IPC Index increased 3.6%, the largest intraday advance since December 2014.
Mexican equities have weakened this year on protectionist rhetoric from Republican Donald Trump, but the emerging market strengthened on prospects of a Clinton win tomorrow after FBI Director James Comey said the agency kept a July conclusion that it wouldn’t push forward with criminal charges against Clinton over e-mails from an unauthorized server.[related_stories]
“There’s less fear,” Jose Cebeira, a senior analyst at Corp. Actinver SAB, told Bloomberg. “Now that it looks like Clinton has a better chance of winning, money is flowing back into Mexico. It’s good for companies that export to the U.S.”
Mexican assets are seen as an election barometer, weakening when Trump advanced in polls and strengthening when the Republican nominee lost ground. Trump has questioned the North American Free Trade Agreement and free trade, vowed to add tariffs on Mexican imports, pledged to deport millions of undocumented immigrants and wanted to build a border wall to keep out Mexican immigrants.
In a final Bloomberg Politics national poll Monday, Clinton led Trump by three percentage points among likely voters nationally.
For more information on the Mexican markets, visit our Mexico category.
iShares MSCI Mexico Capped ETF