Incumbent Morena Party Candidate Sheinbaum On Track For Large Majority

Exit polls show that Mexicans have overwhelmingly voted for Claudia Sheinbaum to replace Obrador has the country’s President. She will not only be Mexico’s first female president but is Obrador’s chosen successor from the leftwing, nationalist ruling Morena party. Sheinbaum is projected to win 55-63% of the vote while her competitor pro-business Galvez representing a coalition of older parties is on track for 27-33%. Thus, the Morena coalition looks headed for a majority in congress.

• USDMXN is down 0.4% in APAC trading to 16.944 off the intraday trough of 16.918, as the market sees this result as providing stability.
• Despite rampant crime, a weak economy and a large budget deficit, Sheinbaum has benefitted from Obrador’s popularity and has promised broad policy continuity. He increased minimum wages to try and reduce inequality. There is some speculation that she may be friendlier towards the private sector particularly because she seems more pragmatic and will likely need finance.
• She is the former mayor of Mexico City and has said she will improve information sharing between police and the judiciary to combat crime.
• Sheinbaum is expected to remain supportive of central bank independence but will have to tackle deteriorating public finances.
• The election result is also important for the US, as it had been working with Obrador to reduce illegal migration.
• Sheinbaum is a former climate scientist and so spending to improve Mexico’s green credentials is expected to rise. She plans to not only restructure the debt of state-owned energy company Pemex but also plans to make it greener. She is hoping that its 2025 bond refinancing will provide funding for renewable energy investment.