Market Volatility to Alter Investment Strategies
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Market Volatility to Alter Investment Strategies

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Thu, 12/15/2022 - 10:21

The geopolitical conflict derived from the war between Russia and Ukraine has generated the pursuance of self-reliance and altered prices in the energy, materials and agriculture sectors. The radical changes have led BlackRock to suggest new portfolio strategies to counter an uncertainty environment that has remained palpable in the world. 

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BlackRock Clarifies New Portfolio Strategies

Latin America faces an economic slowdown derived from a rise in interest rates spawned by recent monetary decisions from the region’s central banks. Inflation pressures have derived from the energy, materials and agriculture sectors. BlackRock delineated that geopolitical tensions have led to the creation of new blocs, which seek to be self-reliant.  

"The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us, and the new regime of greater macro and market volatility is playing out. We expect to turn more positive on risk assets sometime in 2023, but we are not there yet,” said BlackRock.

Banxico Continues to Raise Interest Rates on Uncertainty Environment

Uncertainty has been constant throughout 2022, affecting the evolution of the Mexican economy and inflationary prices. Inflation will likely reach levels unseen in decades, leading Central Banks to further increase interest rates. 

“The environment under which the Bank of Mexico has conducted monetary policy continues to be complex and uncertain. At the global level, inflation remained high and a large number of central banks continued to increase their reference interest rates. Therefore, the conditions in international financial markets have tightened. Interest rates have tended to increase globally, exhibiting volatility, while the US dollar has continued getting stronger. In this context, prospects for global economic activity have deteriorated,” explained Banxico via a press release. 

SHCP Seeks to Release Debt Pressures

The Ministry of Finance and Public Credit (SHCP) will implement an operation to reduce the external debt scheduled for 2025 from US$4.2 billion to US$1.2 billion. 

“The Treasury will reduce the amortization payments of the Federal Government's foreign debt scheduled for the first year of the next administration by 70 percent. With the repurchase of two bonds carried out this year, one denominated in dollars and the other in euros, the deleveraging by 2025 will be equivalent to US$3 billion,” explained the SHCP via a press release.

Nu Enlarges Presence in Mexico Under CNBV Surveillance

The Brazilian neobank Nu has officially become a Popular Financing Company (SOFIPO) in Mexico, which will allow it to offer more products. In Mexico, Nu will be under the oversight of the National Banking and Securities Commission (CNBV) and CONDUSEF.

"We are investing heavily in Mexico because we believe in the incredible potential of this vibrant market and its opportunity for growth as it grows and access to high-quality financial services increases," says Cristina Junqueira, Co-Founder, Nu. 

Photo by:   Image by Pexels from Pixabay

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