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TDS strategist Sacha Tihanyi says the market underprices the risk that the US invokes Article 2205 to signal intent to exit Nafta. He argues Mexican assets would immediately price in the end of Nafta if that happens.
He sees USDMXN reaching 22.00 in that scenario.
An invocation of Article 2205 would sharply weaken the peso, raising the cost of US-sourced feed and grain for Mexican buyers. It is a key trade-policy risk for North American feed markets.
octaafrica.netJan 10, 2018Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
