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Global equity markets and Mexico

Global equity markets posted positive returns in November 2022.

The MSCI World index rose 6.8%, while the MSCI Emerging Markets index rose 14.6%, driven by strong returns in Asian equity markets during the month.

The U.S. Federal Reserve (Fed) raised its target interest rate by 75 basis points for the fourth consecutive meeting, to a range of 3.75 and 4.00 percent.

Global equity markets

In the same month, the DJIA and the S&P 500 recorded yields of 5.7% and 5.4%, respectively, while the interest rate on the 10-year Treasury note fell 44 basis points to 3.61%, and the US dollar depreciated 5.0% (measured by the DXY4 index).

The Mexico Fund reported that the MSCI Mexico index rose 6.4% and the Mexican peso appreciated 2.8% during November to 19.27 pesos, while the Fund’s net asset value increased 6.9%, outperforming its benchmark index.

Mexico

Mexico’s central bank (Banxico) raised its overnight interest rate by 75 basis points to 10.00 percent.

Official GDP for the third quarter of 2022 came in above estimates, increasing 4.3% y/y.

During the first nine months of 2022 Mexico‘s GDP has grown 2.9% versus the same period in 2021.

Finally, the rating agency Fitch affirmed Mexico’s ‘BBB-‘ credit rating with a stable outlook supported by a prudent macroeconomic policy framework, solid and robust external finances and stable debt levels.

US Mexico Fundation believes there are significant opportunities for trade and investment in the United States and Mexico arising from the Mexico-United StatesCanada Agreement (USMCA), ranging from “traditional” manufacturing (automotive, aerospace, machinery and equipment, electrical and electronics, steel and steel products, metals and metal products, textiles and apparel); high-tech sectors, including medical equipment, pharmaceuticals and the digital economy; agriculture and agribusiness; as well as transportation and logistics.

In addition US Mexico Foundation believes that the three North American countries should work to develop and apply the concept of “Ally Shoring,” based on the principle that by producing together and exporting to the world, the USMCA region can become the most competitive region on the planet.

 

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