[SNE] The Volatility Set 2018 (second part)

Continuing with the theme of the Volatility Set 2018, we expose the following elements of influence said Set:

- US Tax Reform This is a major issue since it provokes incentives to mobilize investments or decisions on future investments. In itself, as the main world market, USA, it is an entity that attracts a lot of investment matrix. But now, with a much more simplified and presumably cheap fiscal structure, that economy may still be more attractive.

However, the fiscal issue does not mean a total issue for an investment decision either. So there are many considerations to be taken. But in the case of Mexico, it does generate an extra front, regarding the loss of competitiveness that the volatile environment since 2013 has suffered, as well as its own fiscal structure that is itself expensive in taxes and in the form of compliance.

The issue will no longer have specific dates of impact, but when companies for better tax treatment in the US, announce their preference and gradually there will be less investment in Mexico, or worse, although difficult, decrease the existing one.

In any case, according to the article that we exposed of the International Battle of Taxes for Tax Reform of the USA (http://bit.ly/2zcZ54Y), other nations will activate scenarios of volatility, by modifying fiscal rules to counteract the loss of competitiveness with respect to the US.

- Presidential Elections Mexico. By nature, they generate volatility, given their great possibility that any candidate will be elected president. In your case, a choice of two options is presupposed, the right or the left. In fact, it is a much more complicated issue and with 4 options at the moment, which could dilute the vote to the degree that the winner does it with less than 30% of the voters in their favor. Therefore, promoting a judicialization of the process and even social mobilizations.

The above, will begin on March 29 and when relevant issues are given or even in the debate or debates that are scheduled, there will probably create volatility, like the day of the election, July 1, and the terms of probable legal resources and resolutions.

- US Legislative Elections This will have less impact in the process, but high in the result, especially from the result of the NAFTA issue at that time, the impact of fiscal reform on the budget structure and US debt, and in particular the status of the electoral collusion investigation of the current government in the USA.

The election is Tuesday, November 6, 2018, therefore from certain results biased to one party or another in that country, and if necessary imminent and close actions, there would be volatility in that country, its indicators and consequences to Mexico.

- Petroleum. Oil is set to stabilize between 60 and 70 dollars per barrel, yes and only yes, the US, maintain levels of production and current inventories, OPEC and allies comply with the agreement and global demand is growing steadily. It is unlikely that all these elements will be affirmative.

Therefore, there is likely to be volatility, especially when a dollar increases value and depreciates oil when there is more US production. taking advantage of the market and affecting the OPEC Agreement, when Russia leaves the OPEC Agreement, or when the world demand does not end grows in the way expected.

The global growth with which it closes 2017, gives the confidence to stabilize this market; but we will have to wait for the full year and confirm the data, subject to finding caps that inhibit the growth trend.

Every day there are reports that influence the market; there are also periodic reports of AIE, OPEC, and entities that study the market, so each one will create scenarios or not of volatility.

...to be continued...