Salient to Investors:
Pimco is the biggest holder of peso bonds.
Bank of America says that a Romney win could spark a selloff in Treasuries that will be mirrored in Mexican notes, the most correlated to US government bonds of any debt in Latin America.
Kevin Daly at Aberdeen Asset Management said Romney will want a much tighter monetary policy, a negative for Treasuries short-term.
Mutual funds, pensions and hedge funds outside Mexico poured a record $6.81 billion in 2012 into Mexican debt securities.
Claudio Irigoyen at Bank of America says a Romney win will increase speculation of a more hawkish Fed and lead to declines in Mexico’s peso debt as US Treasury yields rise.
Josh Thimons at Pimco says US monetary policy will remain accommodative regardless of who wins.
Alberto Bernal at Bulltick Capital Markets says a Romney win won’t undermine the gain in Mexican peso bonds because the US government can’t force Bernanke to change monetary policy.