HOUSE_OVERSIGHT_010609.jpg
1.96 MB
Extraction Summary
7
People
6
Organizations
4
Locations
1
Events
2
Relationships
3
Quotes
Document Information
Type:
Financial research report / market analysis
File Size:
1.96 MB
Summary
This document is a Bank of America Merrill Lynch financial research report titled 'Liquid Insight: Trump’s effect on MXN,' dated September 22, 2016. Authored by Claudio Irigoyen and Ezequiel Aguirre, it analyzes the correlation between Donald Trump's polling numbers and the value of the Mexican Peso, suggesting the currency was undervalued and sensitive to the upcoming US election. The document bears a 'HOUSE_OVERSIGHT_010609' Bates stamp, indicating it was part of a document production to the House Oversight Committee.
People (7)
| Name | Role | Context |
|---|---|---|
| Donald Trump | Subject of Analysis |
US Presidential candidate whose polling numbers are analyzed for their effect on the Mexican Peso.
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| Hillary Clinton | Subject of Analysis |
Mentioned as a factor for a potential profitable strategy if she wins the election.
|
| Claudio Irigoyen | Author |
LatAm FI/FX Strategy/Economist at MLPF&S.
|
| Ezequiel Aguirre | Author |
LatAm FI/FX Strategist at MLPF&S.
|
| Adarsh Sinha | Contributor |
FX Strategist at Merrill Lynch (Hong Kong).
|
| Yang Chen | Contributor |
Rates Strategist at Merrill Lynch (Hong Kong).
|
| Amanda Ens | Recipient |
Email address listed in the vertical margin text indicating the intended recipient of this specific copy.
|
Organizations (6)
| Name | Type | Context |
|---|---|---|
| Bank of America Merrill Lynch |
Publisher of the report.
|
|
| MLPF&S |
Merrill Lynch, Pierce, Fenner & Smith (Affiliation of authors).
|
|
| MLI (UK) |
Merrill Lynch International (UK branch).
|
|
| RealClearPolitics |
Source of polling data used in the financial model.
|
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| Bloomberg |
Cited as a data source.
|
|
| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT_010609'.
|
Timeline (1 events)
Locations (4)
| Location | Context |
|---|---|
|
Context for the election.
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Context for the currency analysis.
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Location of contributors Adarsh Sinha and Yang Chen.
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Location of Global Rates & Currencies Research.
|
Relationships (2)
Byline: 'By Claudio Irigoyen and Ezequiel Aguirre'
Context of the report regarding the US election.
Key Quotes (3)
"MXN may be as much as 15% undervalued"Source
HOUSE_OVERSIGHT_010609.jpg
Quote #1
"In our view, buying the Mexican peso likely would prove a profitable strategy if Hillary Clinton wins."Source
HOUSE_OVERSIGHT_010609.jpg
Quote #2
"It is generally accepted now that Trump’s chances in the US election have been a major driver of the Mexican peso"Source
HOUSE_OVERSIGHT_010609.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (3,312 characters)
Liquid Insight
Trump’s effect on MXN
Trump’s effect on MXN
Bank of America Merrill Lynch
22 September 2016
Key takeaways
• We provide an empirical analysis of Donald Trump’s potential effects on the Mexican peso
• Our analysis suggests the exchange rate is perhaps as much as 15% undervalued
• We remain neutral for now given US election risks are likely to remain high in the near term
• We provide an empirical analysis of Donald Trump’s potential effects on the Mexican peso
• Our analysis suggests the exchange rate is perhaps as much as 15% undervalued
• We remain neutral for now given US election risks are likely to remain high in the near term
By Claudio Irigoyen and Ezequiel Aguirre
Chart of the day: MXN may be as much as 15% undervalued
[Chart displaying graph with Y axis 12-20 and X axis 2014-2016. Legend: Model (without Trump), Model (with Trump), MXN]
Source: BofA Merrill Lynch Global Research, Bloomberg
[Chart displaying graph with Y axis 12-20 and X axis 2014-2016. Legend: Model (without Trump), Model (with Trump), MXN]
Source: BofA Merrill Lynch Global Research, Bloomberg
Trump’s effect on MXN
We provide an empirical analysis of Donald Trump’s effects on the Mexican peso. Our analysis suggests the exchange rate is perhaps as much as 15% undervalued. In our view, buying the Mexican peso likely would prove a profitable strategy if Hillary Clinton wins. However, we remain neutral for now given US election risks are likely to remain high in the near term.
We provide an empirical analysis of Donald Trump’s effects on the Mexican peso. Our analysis suggests the exchange rate is perhaps as much as 15% undervalued. In our view, buying the Mexican peso likely would prove a profitable strategy if Hillary Clinton wins. However, we remain neutral for now given US election risks are likely to remain high in the near term.
A model of MXN weekly returns including Trump
We estimate a model of MXN returns with standard financial fundamentals that also includes Donald Trump’s RealClearPolitics polling average in the US presidential election. It is generally accepted now that Trump’s chances in the US election have been a major driver of the Mexican peso (Chart 1).
We estimate a model of MXN returns with standard financial fundamentals that also includes Donald Trump’s RealClearPolitics polling average in the US presidential election. It is generally accepted now that Trump’s chances in the US election have been a major driver of the Mexican peso (Chart 1).
[Vertical Text on Left Margin:] Unauthorized redistribution of this report is prohibited. This report is intended for amanda.ens@baml.com
[Footer Disclaimer:] Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in FX markets and the financial resources to absorb any losses arising from applying these ideas or strategies.
BofA Merrill Lynch does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Refer to important disclosures on page 6 to 7. Analyst Certification on page 5.
Timestamp: 22 September 2016 12:30AM EDT
11668923
BofA Merrill Lynch does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Refer to important disclosures on page 6 to 7. Analyst Certification on page 5.
Timestamp: 22 September 2016 12:30AM EDT
11668923
[Right Sidebar:]
Rates and Currencies Research
Global
Rates and Currencies Research
Global
Global Rates & Currencies Research
MLI (UK)
MLI (UK)
Claudio Irigoyen
LatAm FI/FX Strategy/Economist
MLPF&S
+1 646 855 1734
claudio.irigoyen@baml.com
LatAm FI/FX Strategy/Economist
MLPF&S
+1 646 855 1734
claudio.irigoyen@baml.com
Ezequiel Aguirre
LatAm FI/FX Strategist
MLPF&S
+1 646 855 9689
ezequiel.aguirre@baml.com
LatAm FI/FX Strategist
MLPF&S
+1 646 855 9689
ezequiel.aguirre@baml.com
Adarsh Sinha
FX Strategist
Merrill Lynch (Hong Kong)
+852 3508 7155
adarsh.sinha@baml.com
FX Strategist
Merrill Lynch (Hong Kong)
+852 3508 7155
adarsh.sinha@baml.com
Yang Chen
Rates Strategist
Merrill Lynch (Hong Kong)
+852 3508 8695
ychen8@baml.com
Rates Strategist
Merrill Lynch (Hong Kong)
+852 3508 8695
ychen8@baml.com
See Team Page for Full List of Contributors
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[Bottom Right Footer:] HOUSE_OVERSIGHT_010609
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