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Mexico's Rally Defies The Noise: Peso Firms As IPC Hits A Record
(MENAFN- The Rio Times) Mexico's markets opened with a tailwind: the peso hovers near 18.31 per dollar while the IPC notched a fresh record around 64,321 after Tuesday's 1.9% surge.
The dollar index sits near 99.5-soft enough to let high-carry currencies breathe-and local buyers extended a run led by consumer and financial bellwethers.
What moved overnight and yesterday: the dollar weakened modestly, EM risk held firm, and Mexico's benchmark broke above 64,000 for the first time.
Gains were broad but clearest in banks and staples, helped by steady domestic demand and the view that Banxico's measured easing keeps Mexico's real rates attractive even after last week's 25 bp trim.
Top movers on the way up: Regional (+4.8%), Grupo Carso (+4.6%), Arca Continental (+3.4%), Banorte (+3.3%), and Walmart de México (+2.8%).
Laggards that underperformed around the highs or in Monday's softer tape: Actinver B (−4.1%), Liverpool (−3.2%), Grupo Aeroportuario del Sureste (−2.6%), Grupo Bimbo (−2.7%), and Grupo Carso (−3.7%) earlier in the week.
Why stocks keep grinding higher despite politics-and why the peso keeps firming against the dollar: Mexico's macro mix remains unusually supportive.
Nearshoring is funneling investment into manufacturing corridors; corporate earnings in banks, consumer staples and logistics have proved resilient; public debt is low by regional standards; and remittances cushion household spending.
Crucially, Banxico's inflation-first credibility preserves one of the widest positive real-rate cushions in major EM, anchoring the currency and lowering local equity risk premia. Add a range-bound, sub-100 dollar index and Mexico becomes a straightforward carry-and-quality trade.
Technical picture: USD/MXN sits beneath clustered daily moving averages with RSI near 50; 18.26–18.20 is first support, 18.45–18.53 resistance. Bias is peso -positive while DXY stays capped.
On equities, the IPC's daily and 4-hour charts show a clean up-channel, MACD positive and RSI mid-60s-momentum is strong but not yet stretched; 63,100–62,800 looks like the first buy-the-dip zone.
What to watch next: any surprise hawkish turn in U.S. data that lifts DXY back above 100; Banxico communication on pass-through from selective tariffs; breadth within banks, staples and industrials; and whether foreign inflows into Mexico trackers hold as EWW trades near its highs.
Bottom line: patient monetary conservatism, solid cash-flow champions, and nearshoring tailwinds are outweighing political frictions-sending the IPC higher and the peso steadier.
The dollar index sits near 99.5-soft enough to let high-carry currencies breathe-and local buyers extended a run led by consumer and financial bellwethers.
What moved overnight and yesterday: the dollar weakened modestly, EM risk held firm, and Mexico's benchmark broke above 64,000 for the first time.
Gains were broad but clearest in banks and staples, helped by steady domestic demand and the view that Banxico's measured easing keeps Mexico's real rates attractive even after last week's 25 bp trim.
Top movers on the way up: Regional (+4.8%), Grupo Carso (+4.6%), Arca Continental (+3.4%), Banorte (+3.3%), and Walmart de México (+2.8%).
Laggards that underperformed around the highs or in Monday's softer tape: Actinver B (−4.1%), Liverpool (−3.2%), Grupo Aeroportuario del Sureste (−2.6%), Grupo Bimbo (−2.7%), and Grupo Carso (−3.7%) earlier in the week.
Why stocks keep grinding higher despite politics-and why the peso keeps firming against the dollar: Mexico's macro mix remains unusually supportive.
Nearshoring is funneling investment into manufacturing corridors; corporate earnings in banks, consumer staples and logistics have proved resilient; public debt is low by regional standards; and remittances cushion household spending.
Crucially, Banxico's inflation-first credibility preserves one of the widest positive real-rate cushions in major EM, anchoring the currency and lowering local equity risk premia. Add a range-bound, sub-100 dollar index and Mexico becomes a straightforward carry-and-quality trade.
Technical picture: USD/MXN sits beneath clustered daily moving averages with RSI near 50; 18.26–18.20 is first support, 18.45–18.53 resistance. Bias is peso -positive while DXY stays capped.
On equities, the IPC's daily and 4-hour charts show a clean up-channel, MACD positive and RSI mid-60s-momentum is strong but not yet stretched; 63,100–62,800 looks like the first buy-the-dip zone.
What to watch next: any surprise hawkish turn in U.S. data that lifts DXY back above 100; Banxico communication on pass-through from selective tariffs; breadth within banks, staples and industrials; and whether foreign inflows into Mexico trackers hold as EWW trades near its highs.
Bottom line: patient monetary conservatism, solid cash-flow champions, and nearshoring tailwinds are outweighing political frictions-sending the IPC higher and the peso steadier.
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