Financial and Economic Brief - Feb. 28, 2017

by © Liberty Publishing, Inc.

Peso Up Over 5%

In February, Mexico's peso has turned out to be one of the best performers in the world, up over 5%. Since November, Mexico's central bank has raised interest rates three times and sold U.S. dollars to international investors, all meant to raise the peso that's been weighed down by Trump's threats. His warnings to potentially put tariffs on Mexican imports and withdraw from NAFTA helped push the peso down to an all-time low in January. Investors believe the Federal Reserve may be waiting to hike rates for a few more months, which is generally positive news for countries like Mexico.
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U.S. Jobless Claims Up

According to the Labor Department, claims for state unemployment benefits increased 6,000 to a seasonally adjusted 244,000 for the week ended February 18. However, the four-week average of claims fell 4,000 to 241,000 its lowest level since 1973, pointing to strengthening labor market conditions. It was the 103th straight week that jobless claims remained below 300,000, a threshold associated with a strong labor market. The labor market is at or close to full employment, with the unemployment rate at 4.8 percent.
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Doubts Over LSE and Deutsche Boerse Merger

The London Stock Exchange's (LSE) merger with Deutsche Boerse is uncertain after the LSE determined it couldn't observe certain conditions imposed by regulators. The LSE said the European Commission, the executive branch of the European Union, demanded that it sell its majority stake in MTS, an electronic trading platform for European wholesale government bonds, because of competition concerns. The LSE said this would be detrimental to its business in Italy and the wealth of the merged company. Its board concluded that it could not commit to the divestment of MTS, and that it believes the Commission would likely reject the merger.
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