Mexican Markets Recover as Trump Softens Trade Stance
Mexico City, January 23 (Reuters) - Mexican markets rebounded on Thursday after a volatile session, as U.S. President Donald Trump provided few details about his trade plans in a highly anticipated speech to world leaders at the World Economic Forum in Davos.
Instead, Trump said he was working "very well" with Mexico to reach deals, after suggesting earlier this week that he could impose tariffs on neighboring Mexico and Canada in the near future.
* The peso traded at 20.3780 per dollar near the end of trading, up 0.53% from Wednesday's LSEG reference price, though it briefly dipped into negative territory during Trump's remarks.
* Since returning to office on Monday, Trump has proposed imposing tariffs of 25% on Mexico and Canada and 10% on China starting February 1. He has also threatened to tax European imports.
* However, he has so far provided few details on his plans, leading some analysts to believe that they may be more of a negotiating tool on other issues, such as illegal immigration and drug trafficking in Mexico's case.
* Currency specialists say that the uncertainty over tariffs will nevertheless continue to weigh on financial markets in Mexico, whose economy is heavily oriented towards its northern neighbor.
* "The fear of tariffs seems to be diminishing," Jorge Gonzalez, head of the consulting firm Asesores en Divisas y Riesgos, said in an analysis note. "We will see more clarity, although volatility is not ruled out due to potential upcoming comments."
* In its fourth consecutive session of gains, the benchmark S&P/BMV IPC climbed 0.22% to 51,054.91 points, its highest closing level since mid-December.
* The rally was led by two of the country's top cement companies.
* Shares of Cemex rose 3.15% to 11.78 pesos, while GCC gained 2.92% to 189.55 pesos.
* In the secondary debt market, the yield on the 10-year bond fell one basis point to 10.08%, while the 20-year rate declined three to 10.42%.