Mexico’s peso bonds advanced for the first time in five days as the highest yields in six month revived demand that had waned amid concern the U.S. Federal Reserve could pare record stimulus.
Yields on local currency debt due in 2024 fell six basis points, or 0.06 percentage point, to 5.51 percent at 4 p.m. in Mexico City, according to data compiled by Bloomberg. The peso increased 0.6 percent to 12.8320 per dollar after earlier touching 13.1061 per dollar, the weakest level in 2013.
Mexico’s local-currency debt had tumbled as speculation mounted that the Fed will reduce stimulus that pushed the holdings of foreign investors, many escaping near-zero interest rates at home, to all-time highs last month. That helped push yields up 0.93 percentage point in the past month, while the peso lost 5.8 percent in the period.
The Finance Ministry sold 4.5 billion pesos ($349 million) in debt maturing in 2042 at an auction today.
The national statistics agency said today industrial output rose a lower-than-forecast 3.3 percent in the year through April, coming in below the median estimate of analysts surveyed for a third straight month.
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