It could hardly have been closer. After a recount which finished yesterday, the difference between the two candidates for Mexico’s presidency was razor-thin. But Felipe Calderón, the businessman’s favourite, appears to have emerged victorious, and Mexican markets reacted accordingly.

Uncertainty will hang around for a while, though, as the disappointed candidate, Andrés Manuel López Obrador, seems likely to challenge the result. Although this is unsettling for markets, it will not trigger a financial crisis. Mexico is a more stable country than it was even at the last presidential elections six years ago. Inflation is under control, as is the budget. A modest current account deficit this year is likely to be more than fully covered by foreign direct investment inflows. Meanwhile, the government has pre-funded all its external financing needs until the end of 2007.