Economy & Business - April 2005

The financial markets are jumpy for several reasons. One is the political crisis caused by the government's attempt to knock the mayor of Mexico City, Andres Manuel López Obrador, out of the presidential election in 2006. Another reason for the jumpiness is the volatile state of the US economy. Decent manufacturing output figures on 21 April reassured the US and domestic investors, but the contradictions in US economy policy must eventually send the economy into recession that will have grim implications for Mexico. The third reason for the markets' jumpiness is the central bank's inability to squeeze inflation out of the economy.