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Peso Climbs As AMLO Caves To Trump, Says Mexico Will Crack Down On Immigration

Courtesy of ZeroHedge. View original post here.

A surfeit of promising trade headlines, combined with Jerome Powell's suggestion that the central bank would step in to backstop the market by cutting rates if the trade war fallout should worsen, has provoked a parabolic move higher in stocks Tuesday, propelled in part by the biggest short squeeze since the first week of the year.

And although President Trump's insistence that the first round of tariffs on Mexican imports would go into effect on June 10, made during a press conference with Theresa May, briefly weighed on stocks and the peso, Mexican President Andres Manuel Lopez Obrador has responded with some jawboning of his own.

The peso climbed Tuesday morning in New York after AMLO said during a news conference in the Gulf of Mexico port of Veracruz that Mexico could be ready to step up measures to contain migration in order to reach a deal with the White House, Reuters reports.

Peso

A Mexican delegation led by Foreign Minister Marcelo Ebrard will discuss the dispute with US officials in Washington on Wednesday, and Lopez Obrador said he expected "good results."

"The main thing is to inform about what we’re already doing on the migration issue, and if it’s necessary to reinforce these measures without violating human rights, we could be prepared to reach that deal," Lopez Obrador said.

In spite of Trump's comments, Ebrard has said there's an 80% chance that the country will be able to avoid tariffs. AMLO's conciliatory comments contrast with reports from yesterday that Mexico might respond with retaliatory tariffs of its own.

Trump's tariffs arrive at a particularly delicate time for the Mexican economy, which contracted during the first quarter. Mexico's economy is heavily reliant on trade with the US, and with USMCA in limbo, AMLO has assured the public he has a "plan" to ensure that the tariffs – which could max out at 25% – don't impoverish the country, though AMLO has said he won't engage in any trade wars with the US.


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