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LONDON (Reuters) -Claudia Sheinbaum has won a landslide victory to become Mexico’s first female president, inheriting the project of her mentor and outgoing leader Andres Manuel Lopez Obrador, whose popularity among the poor helped drive her triumph.
The ruling coalition was also on track for a possible two-thirds super majority in both houses of Congress, which would allow the coalition to pass constitutional reforms without opposition support.
Below is the reaction of analysts to the latest news:
ADRIAN E HUERTA, STRATEGIST, JPMORGAN
„Sheinbaum’s acceptance speech was directed towards all Mexicans, and sought to calm down markets by stressing that her administration will guarantee an autonomous central bank, keep the division between economic and political powers, abide by legality and preserve a disciplined fiscal stance. She also mentioned that it would boost private investment, both national and foreign.”
JIMENA BLANCO, CHIEF ANALYST, VERISK MAPLECROFT
„The question we now have is nobody really knows what kind of Sheinbaum they’re going to get once she becomes president. She is extremely close to Lopez Obrador, but will she remain that close? Or will she pursue her own agenda? And if she does, she obviously has an interest and also a lot of experience with the energy industry, and maybe the changes we see are not as drastic as we would have seen under Lopez Obrador.”
„Before the election, everybody had priced in a continuation of similar policies with similar institutional restraints on the executive.”
ANDRES ABADIA, CHIEF LATAM ECONOMIST, PANTHEON MACROECONOMICS
„Sheinbaum’s victory is outstanding, granting her a robust mandate to tackle Mexico’s key challenges. While her victory was widely anticipated by the markets, which should take the result relatively well, the potential qualified majority could open the door for (her party) Morena to increase concentration of power and pose a threat to institutional checks and balances.”
„So far, though, the president-elect has struck a more conciliatory tone, promising to build on the „advances” of the outgoing administration while adopting a more investor-friendly approach. In the near term, the main driver for Mexican assets will likely be external conditions, particularly the actions of the Federal Reserve, rather than domestic politics.”
PIOTR MATYS, SENIOR FX ANALYST, IN TOUCH CAPITAL MARKETS
„The peso is underperforming amid seemingly growing concerns amongst investors that by securing supermajority in the lower house the governing coalition could be tempted to implement non-market-friendly policies.”
JASON TUVEY, DEPUTY CHIEF EMERGING MARKETS ECONOMIST, CAPITAL ECONOMICS
„Policy continuity will largely prevail under a Sheinbaum government, particularly when it comes welfare policy. In a speech shortly after the preliminary results were announced, Dr. Sheinbaum stated that her government will 'dedicate public funds to continue President Lopez Obrador’s social programmes’. But she clearly has one eye on reassuring investors who are concerned about the health of Mexico’s public finances, stating that 'our government will be austere… and fiscally responsible’.
„One key area of difference with the Amlo (Lopez Obrador) administration is likely to be energy policy. While Dr. Sheinbaum said that she will promote 'energy sovereignty’, perhaps a nod to (for now) continuing to provide support for the state oil company Pemex, her environment-friendly credentials shone through as she called for a focus on renewable energy.”
HASNAIN MALIK, STRATEGY & HEAD OF EQUITY RESEARCH, TELLIMER
„Should Sheinbaum’s Morena party and its allies secure a two-thirds majority in the lower house of congress and a majority in the upper house… then the divisive constitutional reform agenda, laid out by Lopez Obrador in February 2024 (eg changes to pensions, wages, supreme court) comes sharply into focus and creates downside risk for Mexico asset prices – because they risk sparking large scale protests and, if implemented, they risk undermining the strength of institutions.”
CHRIS TURNER, GLOBAL HEAD OF MARKETS, ING
„The question is whether the Morena party has done so well that it could command a super-majority and try to pursue market non-friendly policies of constitutional reform.”
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