(MENAFN- Your Mind Media ) The MXN started the week in a global environment dominated by the “nfo”mation “fog” surrounding the US government shutdown, now in its sixth day and causing the suspension of key publications (employment, consumption, investment).—For the markets—and for Banxico—this means navigating with alternative compasses (private surveys, nowcasts) and a premium of uncertainty on the Fed's rate cut schedule. The baseline narrative remains one of a fragile dollar due to expectations of an imminent rate cut, but with intermittent volatility until the fiscal shutdown in Washington is resolved.
Against this backdrop, two external factors are relevant for the peso: (1) somewhat firmer oil prices after a smaller-than-expected adjustment in OPEC+ supply, which supports the export basket and, marginally, the appetite for carry in Latin America; and (2) flows to emerging markets, which, although they have lost traction in recent days, still show an appetite for risk in high-carry fixed income/FX in 2025. None of this eliminates the MXN's sensitivity to shutdown headlines, but it does“give ”t a tactical “floor” when the global dollar weakens.

The price front remains the anchor of monetary policy: inflation in the first half of September accelerated again (3.74% annually; core at 4.26%). Against this backdrop and tepid growth, Banxico's bias is gradualist: it recognizes slack, but does not yield quickly on the core. For the peso, this means that the interest rate differential with the US continues to provide support, although any headline about the shutdown that shifts Fed expectations will be transmitted almost immediately to the MXN.

Looking ahead to the coming days, the MXN risk map combines: (i) resolution or prolongation of the US government shutdown; (ii) th— sequence of local data—starting with inflation and —hen industrial production—which will confirm whether the economy is losing traction; and (iii) the pulse of commodities, with oil prices holding steady but doubts about demand that may limit their positive effect on the balance of payments.

In short: as long as the Fed remains on track to cut rates and Banxico maintains an attractive spread, the peso will remain supported; but visibility is low and headline shocks (shutdown) will continue to impose a hea”line-driven trading regime.”

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