For the second consecutive day, the markets reacted negatively upon the news that the electoral avalanche of Brunette Sunday guarantees you qualified majority in Congress and practically in the Senatewhich they fear will lead to legal uncertainty. He weight suffered another drop in front of dollar and closed in New York at 17.88 units per dollar. Their losses exceeded those of Mondaywhich unleashed volatility that had not been seen in seven months, worrying the Ministry of Finance and the campaign team of Claudia Sheinbaumvirtual president-elect, due to the unexpected nervousness in the markets.
The greatest fear, however, is not for what happens in October, when the new governmentbut what several investors call “the September window”when the President Andrés Manuel López Obrador cohabit with the Morena supermajority and its allies in the new legislature. “It is the window of greatest concern,” declared Gustavo Medeiros, head of Research at Ashmore, a group specialized in managing investments in emerging countries, to Reuters. “Anything is possible,” Shamalia Khan, head of UBS Asset Management for emerging markets, told Bloomberg. “They have a very important mandate. Are they going to use it to resolve some of the most important issues such as tax and energy reform? Or they will focus on other priorities that are not considered positive for the markets.”
Lopez Obrador did not help calm the markets, and on Monday, in the midst of the shocks, he said that he would speak with Sheinbaum for determine whether to present its package of constitutional reforms before he began his administration. The most disturbing reforms are those of the Power of attorney, because it would open the door to elect ministers of the Supreme Court, judges and magistrates by popular election, who think they would make ideological decisions, which eliminates autonomous bodies and eliminates checks and balances. Another reform that they think can return is the energy reform, which with this majority would limit foreign investments, allow expropriations and harm Mexico’s opportunities in the market. nearshoring.
The nervousness did not diminish in the early hours of Monday after the announcement that Lopez Obrador that Ramírez de la O would repeat as Secretary of the Treasury. It did not help internally that he interfered in a unique responsibility of the virtual president-elect, and generated a series of contradictory messages during the day about press conferences to calm the markets, which were canceled. Early yesterday, Ramírez de la O held a conference call with investors to try to reassure them, but his message was disappointing.
In just over two minutes he spoke only about what he will do to reduce the fiscal deficit next year, reduce debt and once again guarantee the autonomy of the Bank of Mexico. He said nothing to calm the markets about the medium-term scenarios and the “September window” because he cannot guarantee anything. It is impossible for him to have an agreement with López Obrador so that he does not send the reforms in September, and he cannot commit that if the initiatives arrive in the next administration, the parties that threaten the rule of law and provide legal certainty will be excluded.
This is what most worries all investors and companies, accustomed to dealing with dictatorships, authoritarian regimes, warlords who divide a country into territories, and unstable democracies. For big capital, the type of government in a country does not matter, but rather whether the rules or laws are respected. The experience with López Obrador is that he does not respect the laws and usually changes the rules of the game as needed.
The reform of the Judicial Branch was the only topic that investors and businessmen addressed with Sheinbaum in the various meetings they held with her in Mexico City and Monterrey. The unanimous request was that the reform not be carried out under the terms that it is proposed – access by direct vote for ministers, judges and magistrates -, to which Sheinbaum He didn’t respond, but he stopped talking about it since then.
The then candidate thought she could deal better with the issue and kick it forward if Morena did not reach the qualified majority, which did not happen and placed her in an uncomfortable situation because she would have to deal with the markets and investments, while López Obrador , architect of what is happening, would see things from his ranch. The president has no remedy, and his successor should know it. Yesterday, López Obrador said that the markets had reacted that way because they were uninformed.
The investors are waiting for a signal from the virtual president-elect, like the announcement of his economic cabinet. In addition to Ramírez de la O, another important position will be the director of Pemex, where the Undersecretary of the Treasury, Gabriel Yorio, and the leader of Morena, Mario Delgado, have already expressed their interest in the parastatal to Sheinbaum’s team. A great option he has in Gerardo Esquivel could be vetoed by López Obrador, who already told Sheinbaum that he wants the cabinet to repeat as a sign of continuity.
It does not seem that Sheinbaum will comply with his wishes, and his team is considering the name of former Foreign Minister Marcelo Ebrard to head the Ministry of Economy, with the responsibility of carrying out the renegotiation of the T-MEC, the North American agreement in which he participated at the time of the transition from the government of Enrique Peña Nieto to that of López Obrador. Jorge Islas, a university academic who joined Sheinbaum’s team approximately a year ago, and who developed the entire energy plan, has been emerging in the Ministry of Energy.
In reserve he has the businesswoman Altragracia Gómez, who has made a very good impression among businessmen and investors, who has been in charge of developing the profiles for the cabinet and fulfilling the task of establishing contacts with the teams of the presidential candidates Joe Biden and Donald Trump, although he has expressed that once the new government is established, he wants to return to his activities.
X: @rivapa
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