Mexico’s Sheinbaum secures landslide presidential election win

LONDON (Reuters) – Claudia Sheinbaum has won a landslide victory to become Mexico’s first female president, inheriting the project of her mentor and outgoing leader Andres Manuel Lopez Obrador whose popularity among the poor helped drive her triumph.

The ruling coalition was also on track for a possible two-thirds super majority in both houses of Congress, which would allow the coalition to pass constitutional reforms without opposition support.

Below is the reaction of analysts to the latest news:

PIOTR MATYS, SENIOR FX ANALYST, IN TOUCH CAPITAL MARKETS

“The peso is underperforming amid seemingly growing concerns amongst investors that by securing supermajority in the lower house the governing coalition could be tempted to implement non-market-friendly policies.”

JASON TUVEY, DEPUTY CHIEF EMERGING MARKETS ECONOMIST, CAPITAL ECONOMICS

“Policy continuity will largely prevail under a Sheinbaum government, particularly when it comes welfare policy. In a speech shortly after the preliminary results were announced, Dr. Sheinbaum stated that her government will ‘dedicate public funds to continue President Lopez Obrador’s social programmes’. But she clearly has one eye on reassuring investors who are concerned about the health of Mexico’s public finances, stating that ‘our government will be austere… and fiscally responsible’.

“One key area of difference with the Amlo (Lopez Obrador) administration is likely to be energy policy. While Dr. Sheinbaum said that she will promote ‘energy sovereignty’, perhaps a nod to (for now) continuing to provide support for the state oil company Pemex, her environment-friendly credentials shone through as she called for a focus on renewable energy.”

HASNAIN MALIK, STRATEGY & HEAD OF EQUITY RESEARCH, TELLIMER

“Should Sheinbaum’s Morena party and its allies secure a two-thirds majority in the lower house of congress and a majority in the upper house… then the divisive constitutional reform agenda, laid out by Lopez Obrador in February 2024 (eg changes to pensions, wages, supreme court) comes sharply into focus and creates downside risk for Mexico asset prices – because they risk sparking large scale protests and, if implemented, they risk undermining the strength of institutions.”

CHRIS TURNER, GLOBAL HEAD OF MARKETS, ING

“The question is whether the Morena party has done so well that it could command a super-majority and try to pursue market non-friendly policies of constitutional reform.”