Investors are digesting the win by leftist outsider Andrés Manuel López Obrador in Mexico’s presidential election, trying to assess what‘s next for Mexico’s economy and its relationship with the U.S. as the renegotiation of the North American Free Trade Agreement intensifies.
López Obrador, often called Amlo, symbolizes a big shift for Mexico. He didn’t run on a major party platform, but instead for his self-created Morena party, which pushed a populist agenda.
AMLO’s first speech [on Monday] was one that gave comfort to the market,” said Alberto de la Pena, partner and head of the Mexico and international practice groups at law firm Haynes and Boone. “He didn’t come off as radical.”
Following his Sunday win, López Obrador and President Donald Trump confirmed they had spoken on the phone for half an hour and were hoping for a fruitful relationship.
As for Nafta, López Obrador said during the end of his campaign that he would continue in the foot steps of his predecessor Enrique Peña Nieto. The uncertainty surrounding the trade pact has added volatility to both Mexico’s peso USDMXN, -1.9229% and the Canadian dollar USDCAD, -0.2123% since the talks began in August last year.
The López Obrador assertion that he won’t turn the negotiations upside down has helped mitigate investor worries, so far, analysts say.