Lopez Obrador Stands Firm on Judicial Reforms Amid Market Volatility

Mexican President Andres Manuel Lopez Obrador reaffirms his commitment to judicial reforms despite market concerns and financial nervousness. Following his party's success in June 2 elections, Lopez Obrador emphasized that corruption within the judiciary must be addressed, even as markets react with volatility, particularly the peso currency and local sovereign debt yields.

Mexican President Andres Manuel Lopez Obrador on Wednesday said that people are "mistaken" if they think that an effort to reform the country's judiciary will be reversed because of market nervousness.

"They are wrong, respectfully, if they are thinking that we are going to go back on reforming the judiciary, which is rotten, which is dominated by corruption, just because there is financial nervousness," Lopez Obrador said during his regular press conference. Mexican markets have been roiled since Lopez Obrador's ruling Morena party performed better than expected in the June 2 general elections, breathing life into stalled efforts to pass a slate of constitutional reforms, including one which would replace an appointed Supreme Court with popularly elected judges.

Mexico's peso currency, a regional high achiever in recent years, has tumbled over 9% since the election, weakening against the dollar as much as 2.2% in early trading on Wednesday and last down some 0.7% on the day. Yields on local sovereign debt continued to rise, with the 10-year benchmark note last yielding 10.5%, the most since 2008. Eurobond spreads were little changed.

In the lower house of Congress, Morena secured the super-majority required to pass constitutional reforms, while coming just shy of the super-majority in the Senate.