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MEXICO: Galvez Concedes As Sheinbaum Looks Forward To Supermajority

MEXICO
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Main opposition candidate Xóchitl Gálvez has conceded the presidential race to left-wing nationalist MORENA candidate Claudia Sheinbaum. The win for incumbent President Andres Manuel Lopez Obrador's chosen successor was largely priced in by markets. However, the scale of support for MORENA and its allies in the legislature, where MORENA looks set to have won a supermajority in the Chamber of Deputies and is also in with a strong chance the same in the Senate, has led to some market turbulence. 

  • Based on the 'quick count' MORENA and its allies have won between 346 and 381 seats in the Chamber of Deputies, a supermajority in the 500-member chamber even at the lower end. In the Senate the projection is for MORENA and its allies between 76 and 88 seats, with only the higher end of the projection crossing the 85-seat threshold. It should be noted that the centre-left Citizens' Movement is projected between four and eight seats. Given the scale of the MORENA win, the party could well back MORENA, providing them with the additional seats to secure 2/3.  
  • Supermajorities would give the Sheinbaum significant leeway in changing the Mexican constitution. Bloomberg reports on potential constitutional amendments that, "...include plans to reduce the number of lawmakers and allow for the direct election of Supreme Court justices. They also include eliminating independent regulators, like the antitrust commission, as well as establishing new pension obligations and mandatory minimum wage hikes." Constututional amendments concerning changes to the judiciary can often garner international attention an unnerve investors due to perceptions of meddling with democratic institutions. 
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Main opposition candidate Xóchitl Gálvez has conceded the presidential race to left-wing nationalist MORENA candidate Claudia Sheinbaum. The win for incumbent President Andres Manuel Lopez Obrador's chosen successor was largely priced in by markets. However, the scale of support for MORENA and its allies in the legislature, where MORENA looks set to have won a supermajority in the Chamber of Deputies and is also in with a strong chance the same in the Senate, has led to some market turbulence. 

  • Based on the 'quick count' MORENA and its allies have won between 346 and 381 seats in the Chamber of Deputies, a supermajority in the 500-member chamber even at the lower end. In the Senate the projection is for MORENA and its allies between 76 and 88 seats, with only the higher end of the projection crossing the 85-seat threshold. It should be noted that the centre-left Citizens' Movement is projected between four and eight seats. Given the scale of the MORENA win, the party could well back MORENA, providing them with the additional seats to secure 2/3.  
  • Supermajorities would give the Sheinbaum significant leeway in changing the Mexican constitution. Bloomberg reports on potential constitutional amendments that, "...include plans to reduce the number of lawmakers and allow for the direct election of Supreme Court justices. They also include eliminating independent regulators, like the antitrust commission, as well as establishing new pension obligations and mandatory minimum wage hikes." Constututional amendments concerning changes to the judiciary can often garner international attention an unnerve investors due to perceptions of meddling with democratic institutions.