Market impact: Mexico’s Sheinbaum says she spoke with Trump as trade negotiations continue

Severity: medium Alert worthy: false

Summary

Mexican President Sheinbaum confirmed discussions with former US President Trump amid ongoing US-Mexico trade negotiations, where Sheinbaum is seeking a decrease in tariffs for a new bilateral trade deal.

Impacts

• FX (MXN): bullish (confidence 0.7) — Ongoing trade negotiations aiming for tariff reductions between the US and Mexico reduce trade policy uncertainty and could lead to increased trade flows, which is generally supportive for the Mexican Peso.
• Freight: bullish (confidence 0.6) — A successful bilateral trade deal with reduced tariffs would likely stimulate increased cross-border trade volumes, benefiting freight demand (trucking, rail) between the US and Mexico.
• Grains (ZC, ZW, ZS): bullish (confidence 0.5) — If tariff reductions extend to agricultural products, it would be bullish for US grain exports to Mexico, a significant market for US corn, wheat, and soybeans.
• Metals: bullish (confidence 0.5) — Reduced tariffs on Mexican metal exports to the US, or vice versa, would be bullish for Mexican metal producers and potentially ease supply chain costs for US industries.
• equity beta: bullish (confidence 0.6) — Reduced trade uncertainty and the prospect of lower tariffs could boost investor sentiment and performance for companies with significant exposure to US-Mexico trade, particularly Mexican equities.

Caveats

• The specific details and outcome of the ongoing trade negotiations are uncertain.
• The role and impact of former President Trump's involvement in these discussions is unclear at this stage.