The Mexico Fund

The Mexico Fund (NYSE: MXF)

Fund Manager’s Comments

As of June 2017

Global equity markets registered mixed returns during June 2017. The U.S. Federal Reserve increased its overnight interest rate by 25 basis points to a range of between 1.00% and 1.25%, as expected by most analysts. The price of oil (measured by West Texas Intermediate) decreased 5.2% during the month to $46.0 USD/bbl, a decline of 19.1% year-to-date. Regarding precious metals, during the first half of 2017 the prices of gold and silver increased 8.2% and 4.4%, respectively. The DJIA and the S&P 500 increased 1.6% and 0.5%, respectively, during the month, and the yield on the U.S. 10-year Treasury note increased 10 basis points to 2.30% while the U.S. dollar depreciated 1.3% (measured by the DXY Index6). The MSCI Mexico Index increased 5.3% during June 2017 and the Mexican peso appreciated 2.8% to Ps. $18.12.

In local news, Mexico ìs Central Bank announced an increase in its overnight interest rate of 25 basis points to 7.0%. The National Hydrocarbons Commission (“CNH”) held its first auction of round two (R 2.1) of shallow water blocks for exploration and development. Results were positive as 10 out of 15 blocks were awarded, a success rate of 67%, higher than the 30% to 40% expected by the CNH, with a total estimated investment of $8.2 billion in the following years. Further oil auctions are expected for the remainder of 2017.

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The Mexico Fund, Inc.