Mexican bonds surged 22%, institutions say "trading is far from over"

As emerging markets regained favor in the first half of this year, few trades have generated returns like investing in Mexican local bonds. According to compiled data, Mbonos bonds issued by the Mexican government for public spending financing brought investors a 22% return in 2025, ranking second only to Brazilian government bonds in the emerging market local bond index. Bets on further interest rate cuts by Mexican policymakers and the resilience of the Mexican peso in the face of Trump's tariff war have driven bond yields significantly lower. Companies such as Aberdeen Group, Neuberger Berman, and Pictet asset management believe that due to the attractive yields and expectations of the Federal Reserve easing monetary policy in the coming months, there is further room for rebound. Neuberger's Co-Head of Emerging Market Debt, Gorky Urquieta, said: "Whether from a fundamental, technical, or interest rate valuation perspective, we still see reasons to continue holding positions."