Mexico - A dramatic weakening of institutions and of the rule of law

After approving the judicial reform, Congress is now preparing to eliminate independent regulatory agencies. Morena has pushed through radical reforms even in the face of a negative market reaction to its reforms and a potential decline in foreign investment and an increase in investor disputes. The ruling Morena party will now be tempted to cross the line on issues that were previously unthinkable, which could have a significant negative impact on the markets and especially the MXN, as the FX is the main shock absorber. The combination of Morena's massive power, which will control all three branches of government, the militarization of the police, the elimination of independent oversight, and the abolition of habeas corpus has put the country on a dangerous, but not inevitable, path to one-party rule similar to that of the post-revolutionary period.