Argentina relapses, Mexican peso muted on trade deal

The sense of crisis that engulfed Argentina on Wednesday and Thursday seems to have eased today and, while there is a clear risk that the currency falls further in the near term, based on the real exchange rate it looks like the necessary adjustment may now have happened. Meanwhile, the surprisingly muted reaction in Mexican markets to the country’s trade deal with the US reflects that significant hurdles still need to be cleared – in particular, Canada still seems reluctant to sign on to the deal.