The US economy generated 57,000 jobs in June, half of what was anticipated.
This is the slowest pace of job creation in four months. Additionally, the prior two months' figures were revised downward by 74,000 jobs.
Key points
Banxico Survey improves inflation outlook and anticipates the overnight rate unchanged at 6.50% through the close of 2027.
IMEF indicators confirm fragility of Mexico's economy heading into the second half.
Light vehicle sales in Mexico grew 7.6% annually in June, reaching a historical record for a first half of the year.
The US confirms it will not renew the USMCA for 16 years and the treaty enters a phase of annual reviews.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.42 and $17.52 spot.
US indices are pointing to a moderately positive open in the last session of the week after June non-farm payrolls registered 57,000 new jobs, below consensus estimates, reducing expectations of a Fed rate hike in July. The 2-year Treasury yield was falling toward 4.11% and the dollar index was retreating 0.7%. WTI was falling toward US$67 and Brent was trading around US$71. Google lost its appeal before the EU Court of Justice over an antitrust fine. US-Iran talks in Doha concluded without substantive progress, focusing on matters already agreed upon in the June 17 MOU. US markets close tomorrow for the July 4 holiday.
Monitor
Bolsas / Exchanges
S&P 500
7,568
0.30%
Nasdaq
30,216
0.40%
Dow Jones
52,910
0.50%
IPyC
67,981
1.10%
Monedas / FX (Foreign Exchange)
USD/MXN
17.4606
-0.50%
EUR/MXN
19.997
0.10%
EUR/USD
1.1451
0.70%
Índice DXY
100.68
-0.70%
Tasas / Exchange Rates
Treasury 2 años
4.13
-3.7 bp
Treasury 10 años
4.47
-0.4 bp
TIIE 3 meses
6.58
2.0 bp
M Bono 10 años
9.02
-1.2 bp
Commodities / Commodity Markets
Petróleo (Brent)
70.67
-1.30%
Oro
4,123
2.30%
What you need to know about the economy and markets
Hiring in the United States slowed significantly in June. Non-farm payrolls increased by 57,000 positions, half of what was forecast. Additionally, the prior two months' reports were revised downward by 74,000 jobs. It was notable that the entertainment and hospitality sector reported a contraction of 61,000 positions, despite the World Cup. Nevertheless, the unemployment rate retreated one tenth to 4.2%, a result largely attributable to the decline in the labor participation rate, from 61.8% to 61.5%.
Our Take
Despite the slowdown, the pace of job creation sits exactly at the level considered necessary to absorb new labor market entrants. Therefore, the data is not necessarily a sign of deterioration, but simply of a more moderate pace than in prior months. Additionally, we consider that today's report does not significantly alter the market's bet that the Fed's next move would be a rate hike, though it would delay expectations about the timing of when it would occur.
Banxico's June survey of private sector specialists left the GDP estimate for 2026 practically unchanged at 1.1% and at 1.8% for 2027. On the inflation front, specialists slightly improved their outlook: the headline inflation expectation for the close of 2026 fell to 4.21% from 4.36% in the prior survey, while for 2027 the projection was reduced to 3.80% from 3.85%. Regarding the overnight rate, consensus maintained its year-end expectation at 6.50% for both 2026 and 2027, consistent with the extended pause signal that Banxico reiterated in its June decision.
Our Take
The fact that the rate expectation remains anchored at 6.50% for both years suggests that consensus does not anticipate either additional cuts or a hiking cycle, validating the "hold the rate for an extended period" forward guidance communicated by the Governing Board.
Based on the IMEF Manufacturing Indicator data for June 2026, the overall index recorded a retreat, falling from 48.3 to 47.3 points. With this, the indicator accumulates 27 consecutive months in contraction territory, reflecting the persistence of an adverse environment for industrial activity. The IMEF Non-Manufacturing Indicator showed a slight improvement in the overall index, which rose from 48.8 to 49.0 points, an advance of 0.2 units versus May, though remaining in contraction territory.
Our Take
June 2026 results confirm that both manufacturing and non-manufacturing activity continue to operate in a low-dynamism environment, without clear signs of a sustained recovery that would allow anticipating a cycle change in the short term.
Light vehicle sales in Mexico's domestic market reached 126,778 units in June 2026, representing annual growth of 7.6% compared to the 117,780 units sold in the same month the prior year. In the January-to-June cumulative period, 754,394 vehicles were sold, a figure 5.3% above the 716,299 units recorded in the same period of 2025, equivalent to 38,095 additional vehicles, reaching a record sales volume level for a similar period.
Our Take
Light vehicle sales maintained favorable performance in June, reflecting that domestic demand for durable goods continues to show resilience. The annual growth of 7.6% and the cumulative advance of 5.3% suggest that the automotive market continues to benefit from relatively solid consumption conditions, despite the lower economic dynamism environment.
The US government decided not to grant the automatic extension, arguing that the treaty has "deficiencies" and that it must address trade deficits with Mexico and Canada; annual reviews will be activated, implying that this trade agreement will remain in force for 10 more years, unless in that period an agreement is reached to extend it for another 16 years.
Our Take
The annual review route is adopted and the Treaty remains in force, in principle, until 2036. No country has notified its intention to withdraw, which is positive. However, for sectors with five-to-ten-year investment horizons, the reviews add an uncertainty premium that could well postpone decisions to relocate supply chains to Mexican territory.
Corporate News
According to Financial Times reports, OpenAI has initiated preliminary conversations to offer the US government a 5% stake in the company, as part of a broader proposal under which Washington would receive the same percentage in each of the country's leading AI developers, potentially including Anthropic, Google, and Meta. CEO Sam Altman put forward the idea to the Trump administration as early as 2025.
Our Take
The most relevant question for private investors in OpenAI, and for those evaluating participation in its IPO, is whether a 5% government stake implies some type of additional oversight or influence over the company's strategic decisions, something that Anthropic's agreement with the government regarding access restrictions to its most advanced models suggests could be the case.
The European Court of Justice upheld the antitrust fine of €4.1 billion (~US$4.7 billion) against Google for abuse of dominant position in the Android mobile device market. The ruling opens the door to damage claims by companies affected by Google's conduct. The fine would represent one-tenth of Alphabet's quarterly operating cash flow.
Our Take
This is the largest antitrust fine confirmed by a European court, though its immediate financial impact on Alphabet is manageable given the company's current size. Alphabet still faces active investigations under the European Digital Markets Act regarding its search engine and the Play Store.
Genneia, Argentina's leading renewable energy platform, filed its application to list on the New York Stock Exchange under the symbol GENN as American Depositary Shares (ADSs), becoming the first Argentine company to seek an IPO in the US since 2019. The company recorded revenues of US$96.4 million and net income of US$7.9 million in the first quarter of the year.
Rivian reported second-quarter production and delivery data above consensus expectations. Based on the initial sales launch of its new R2 SUV, the company raised its full-year delivery guidance to a range of 65,000-70,000, surpassing estimates. Rivian shares were rising more than 5% in pre-market trading.
The to-do list
Follow the market's reaction to June's employment data: 57,000 jobs is half of what was expected, with downward revisions of 74,000 in the prior two months, which could moderate bets on a Fed hike in September and move the dollar and bonds during the day.
Watch the USMCA: the US confirmed it will not renew for 16 years and the treaty enters annual reviews, which adds an uncertainty premium to investment decisions in Mexico and will be the dominant theme in the coming months.
It's Thursday, get ahead of as much as possible before the end of the week and don't leave anything important for Friday afternoon.
At 5:00pm Portugal vs. Croatia kicks off, one of the most anticipated matches of the round of 16, prepare something to snack on and enjoy a matchup between sides that always deliver good football.
Dedicate 20 minutes before the match to a session of crunches and planks, no equipment and at home, the body appreciates it before sitting down to watch the game.
Today's quote…
"We are what we repeatedly do. Excellence, then, is not an act but a habit."
— Aristotle
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
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