The US economy generates 172,000 jobs in May, almost double what was anticipated.
In addition, March-April data were revised upward by 93,000, with April's figure settling at 179,000 jobs. The unemployment rate held unchanged for the third consecutive month at 4.3%, a level historically considered full employment.
Markets and Stocks
US futures are retreating this morning, on track to break the nine-week consecutive gaining streak, following the combination of an employment report that beat estimates and the continuation of the rotation out of the technology sector that began with Broadcom's below-expectations guidance. WTI sheds 0.2% and Brent operates near US$93, relatively stable, while Hezbollah formally rejected the US-proposed ceasefire, complicating the negotiation process with Iran, for whom Lebanon is a necessary condition of any agreement. The 10-year Treasury yield advances toward 4.54% following the employment data, with the 2-year bond rising to 4.14% and the 30-year bond surpassing 5.02%.
Monitor
Bolsas / Exchanges
S&P 500
7,560
-0.50%
Nasdaq
30,123
-1.20%
Dow Jones
51,735
0.10%
IPyC
67,563
0.30%
Monedas / FX (Foreign Exchange)
USD/MXN
17.3135
0.20%
EUR/MXN
20.075
0.20%
EUR/USD
1.1595
-0.10%
Índice DXY
99.45
0.00%
Tasas / Exchange Rates
Treasury 2 años
4.15
10.0bp
Treasury 10 años
4.54
6.3bp
TIIE 3 meses
6.51
2.0bp
M Bono 10 años
9.1
0.0bp
Commodities / Commodity Markets
Petróleo (Brent)
94.73
-0.30%
Oro
4,417
-1.30%
Key points
Mexico's consumer confidence falls in May.
Hezbollah and Israel exchange attacks despite the ceasefire.
The Eurozone surprises negatively in the first quarter as GDP contracts -0.2%.
India's central bank keeps the interest rate unchanged but revises downward its GDP forecast and upward its inflation forecast.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.26–$17.38 spot.
What you need to know about the economy and markets
The US economy recorded in May another month of strong employment advances, confirming that the labor market is regaining momentum after last year's rough patch. Thus, 172,000 jobs were created, well above the 88,000 anticipated. In addition, March and April job creation was revised upward by 93,000, with April's figure settling at 179,000 jobs. The unemployment rate held unchanged for the third consecutive month at 4.3%, and wages meet expectations with a monthly variation of 0.3%.
Our Take
Today's report appears to bury any expectation of a Fed rate cut and significantly increases the bet in futures markets of seeing a 25 basis point increase before the end of 2026, in a context of rising inflation stemming from the war with Iran. The March, April, and May employment figures were unexpectedly solid and coincide with other indications that the US economy remains relatively healthy.
Mexico's Consumer Confidence Indicator stood at 45.3 points in May 2026, recording a monthly decline of 0.7 points and an annual decrease of 3.4 points. The deterioration was broad-based across components, with notable declines in the perception of the household's current economic situation (-0.7 monthly points) and the country's future economic situation (-1.6). Additionally, complementary indicators showed a lower expectation regarding employment over the next 12 months (45.1 points, -1.1 monthly points) and a lower willingness to purchase durable goods such as automobiles (28.6 points, -0.7 monthly).
Our Take
Consumer confidence continued to deteriorate in May, reflecting a less favorable perception of households' economic situation and employment prospects. The lower intention to purchase automobiles, along with weaker expectations about the economy, suggests that consumers are maintaining a more cautious stance in the current environment. Taken together, the results point to moderate private consumption in the coming months, in a context of economic deceleration, still-elevated inflation, and greater global uncertainty.
Iran-backed Hezbollah militia rejected a new ceasefire in Lebanon on Thursday and Israel said it would not withdraw troops from the country, undermining US President Donald Trump's efforts to stop the fighting there and reach a peace deal with Tehran. Meanwhile, information leaked that President Trump would not break the ceasefire against Iran unless a US military member died as a result of an Iranian attack.
Our Take
The peace deal between the US and Iran has still not arrived, but negotiations retain their course, keeping alive the hope of a prompt resolution. Markets continue to underestimate the complexities involved in restoring maritime transport through the Strait of Hormuz to pre-war levels, even if Washington and Tehran reach a memorandum of understanding.
Eurozone GDP contracted -0.2% quarterly in Q1 2026, reversing the 0.2% growth observed in the prior quarter. On an annual basis, the economy advanced just 0.3%. This is the first contraction of the region's economy since late 2022 and the most pronounced since Q2 2020. By component, gross fixed investment fell -0.3% quarterly, while exports declined -0.2% and imports increased 0.5%. In contrast, household consumption showed moderate growth of 0.1% quarterly and employment advanced 0.1%, maintaining annual expansion of 0.5%.
Our Take
The GDP contraction confirms the weakening of economic activity in the Eurozone, affected by the decline in investment and the deterioration of the external sector. However, private consumption and employment continue to show some resilience, preventing a deeper slowdown. With this, the data suggest a stagnant economy, with very limited growth and greater risks stemming from the geopolitical environment, high energy costs, and the persistence of inflationary pressures.
India's Reserve Bank (RBI) unanimously decided to keep its benchmark interest rate unchanged at 5.25%, while maintaining its neutral stance. The decision was widely anticipated and marks the third consecutive meeting in which the RBI has kept its rate unchanged, after having accumulated 125 basis points in cuts since February 2025. While assessing the impact of the Middle East war, it has updated its economic forecasts with a downward revision to growth and an upward revision to inflation.
Our Take
The monetary authority is quietly pivoting from an easing bias toward a defensive watchful stance, without yet announcing that change explicitly. Underlying inflationary pressures remain moderate at this point. However, the generalization of inflation through second-round effects on expectations and wages is a real possibility, justifying close monitoring.
Corporate News
Grupo Aeroportuario del Centro Norte reported a total of 2.4 million passengers across its 13 airports during May 2026, a 3.6% year-on-year increase. Domestic traffic grew 4.7%, while international retreated 2.8%. Monterrey, the network's most important hub with 54.6% of total traffic — grew 2.4% in May and accumulates a 3.1% advance for the year. Monterrey's international airport reported an 8.6% decline in international passengers in the month, the largest contraction in the network for that segment.
Our Take
The report is mixed. The sustained domestic growth, particularly in cities with an industrial profile such as Durango, Chihuahua, and San Luis Potosí, is consistent with nearshoring dynamics in northern Mexico. However, the decline in international traffic, which accumulates -2.9% in the first five months, combined with peso appreciation, will continue to pressure revenue per passenger in the highest unit-value segment, replicating the pattern observed in Q1 2026, when the international TUA fell 10.5% in pesos. The international contraction in Monterrey also points to airline capacity reductions on cross-border routes.
Lululemon reduced its annual revenue guidance to a range of US$11.0–11.15 billion, below Bloomberg consensus, and projected low double-digit sales declines in the US for the second quarter. The company cited lower store traffic, a decline in buyer conversion rates, margin pressure from tariffs on imported goods, and a media controversy over the use of "forever chemicals" stemming from a Texas investigation. Shares fell as much as 13% in pre-market trading, accumulating a 40% decline for the year.
S&P Dow Jones Indices confirmed it will maintain its existing eligibility requirements for the S&P 500, implicitly rejecting SpaceX's proposal for a reduced period that would have allowed its IPO inclusion in the index, according to Bloomberg and Reuters reports. The decision means SpaceX will need to trade for at least 12 months before it can be considered for the index, postponing automatic flows from passive funds indexed to the S&P 500.
The to-do list
Monitor markets throughout the day: the solid May employment report buries any expectation of rate cuts and increases bets on a 25 basis point hike before the end of 2026, with the 10-year Treasury pushing toward 4.54%.
Follow the US-Iran negotiations: Hezbollah's formal rejection of the ceasefire complicates the deal with Tehran, and markets continue to underestimate how difficult it will be to reopen the Strait of Hormuz even if a memorandum is reached.
It's Friday — close the week without pending matters: have everything ready before 3pm and enter the weekend with a clear slate.
Tonight, make some basket tacos or simple enfrijoladas, something that doesn't require much time and leaves room to enjoy the evening.
Dedicate 20 minutes to stretching or a short walk, ending the week by moving your body makes a difference for the weekend.
Today's recommendation…
Today's film is México 86, to get fully into the World Cup mood. The story of an executive and his girlfriend who will do everything possible for their country to become host of a World Cup for a second time; a film directed by Gabriel Ripstein.
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
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