Well worth the wait… The Finance Hive’s Chief Growth Officer, Julie Nicolas has been working closely with our FICC Mexico members over the last few years, building an engaged and ever-growing community.
So, on the 13th of June, it was wonderful to connect with our senior members and partners in Mexico City for the very first time—bringing our FICC Mexico Founding Members Meeting to life!
An array of topics were explored, with so many actionable insights, and we’ve summarised the key takeaways for you below. Stay tuned for more dedicated meeting content in the coming weeks…
Basking in the sunshine after a day filled with benchmarking, networking, and tailored discussions
EM vs. Mexico vs. G7
Juan Carlos Alderete, Executive Director, Economic Research and Financial Markets Strategy, Grupo Financiero Banorte
Gabriel Belsol, President, Asociación Mexicana de Inversionistas
Alongside chief storyteller Ricardo Penkoff, FX Trader at Banxico, members analysed current market conditions and drivers of change. What should the buy side have on their radar when it comes to restricted and emerging markets liquidity, and which factors could affect the future stability of Mexico’s “super peso”?
LATAM is now seen as the most attractive region for emerging markets. Mexico in particular is becoming increasingly popular among the buy side due to its high real rates, low political uncertainty, and nearshoring capability. In the long term, however, there are many potential risks for members to consider, including lower rate differential and nearshoring disappointment.
Whilst our members share a positive outlook on Mexico, the reality is that the monetary policy does not reach the real economy at the moment. That said, the buy side agree that the impact of nearshoring and having a geopolitical approach could influence the economic development of the country. The strength of the peso also reflects strong economic data in regard to LATAM, and is of great appeal to the buy side when considering the overall risk of the region.
A Hive reunion across the pond, and taking in the sights in Mexico City before the meeting
Fixed Income Electronification
Hector Lopez-Camacho, Director, LATAM Sales and Client Management, Tradeweb
How is Mexico embracing electronic trading, and what opportunities are there for the buy side to take advantage of? Members unpacked the benefits and implications of Fixed Income electronification with Tradeweb and Mauricio Talamantes, Chief Investment Officer at Seguros Monterrey New York Life.
Challenges range from cost and infrastructure to culture and confidence, and are tough for the buy side to tackle all at once. The biggest issue in Mexico is seemingly the Fixed Income market and capacity of smaller investors, but electronification could be a huge step in the right direction.
The issue of liquidity must be addressed, and serious participation from the sell side is needed to overcome this. Currently, the lack of liquidity affects corporate bonds, tightening the banks in Mexico and the wider region.
The adoption of technology throughout the entire operation process is a must for buy side firms, with straight-through processing (STP) seen as an effective first step.
More Insights from Tradeweb
We also had the pleasure of partnering with Tradeweb at our inaugural Fixed Income Exchange meeting in Bedfordshire on the 18th-19th of April, exploring global portfolio trading, primary markets, and building a better credit trading workflow. Our newly-released wrap report dives into all of these sessions, and is available via the button below. Take a look…
Jim Norcott, Managing Director, GlobalLink Americas Sales, FX Connect
How can streaming processes be better managed? What role do humans play in automation? What kind of controls can the buy side have, and does automation reduce errors? Members discussed the practical steps towards FX workflow automation with FX Connect and Gerardo Molina, Portfolio Manager at Afore SURA.
There has been broad adoption of electronic platforms in the last few years, however, depth of use largely depends on the frequency and size of trades. The recent pandemic has highlighted the value of multi-dealer platforms; the FX market is very fragmented, so heads of desk are turning their focus to automation tools to streamline trading processes and stay ahead of the curve.
Heads of desk agree that large orders in MXN are challenging from a liquidity perspective, and that smaller orders are easier to handle at present.
Our European FX members came together on the 8th-9th of June at Luton Hoo, where we partnered with FX Connect to discuss STP and dynamic automation, and achieving interoperability through data. We’ll be sharing our FX Exchange wrap report in the coming weeks, so keep your eyes peeled…
Join Our FICC Mexico Community
Find out more and get involved with our upcoming meetings by contacting The Finance Hive’s Chief Growth Officer, Julie Nicolas directly.
Simply click on the button to register your details, and Julie will be in touch within 2-3 working days.