Mexico's inflation moderates to 3.94% annually, its lowest level in four months.
The core component, which excludes volatile items such as energy and agricultural products, stood at 4.19% annually.
Markets and Stocks
US markets are pointing to a positive open, extending for a second consecutive day the rebound from the most severe tech selloff of the cycle following the de-escalation of tensions in the Gulf. WTI sheds 2.5% to US$89 and Brent retreats 1.5% to near US$93 after Israel and Iran confirmed having halted their reciprocal attacks and Trump declared being in the final stages of a very good deal. The 10-year Treasury yield sheds to 4.54%. Today the US April trade deficit was published, showing an improvement to US$55.9 billion. In corporate news, OpenAI confidentially filed its IPO prospectus with the SEC, in a week where SpaceX (SPCX) is set to debut on June 12.
Monitor
Bolsas / Exchanges
S&P 500
7,448
0.40%
Nasdaq
29,681
0.80%
Dow Jones
51,013
0.30%
IPyC
65,725
0.10%
Monedas / FX (Foreign Exchange)
USD/MXN
17.3738
-0.50%
EUR/MXN
20.1031
-0.10%
EUR/USD
1.1576
0.40%
Índice DXY
99.71
-0.30%
Tasas / Exchange Rates
Treasury 2 años
4.14
-1.7bp
Treasury 10 años
4.54
-0.6bp
TIIE 3 meses
6.51
2.0bp
M Bono 10 años
9.16
0.0bp
Commodities / Commodity Markets
Petróleo (Brent)
92.80
-1.50%
Oro
4,341
0.30%
Key points
China accelerates its exports with an increase of nearly 20.0% in May.
Israel and Iran have agreed to halt mutual attacks for the time being.
Germany's industrial production grows in April, but stagnation persists.
US small business confidence deteriorated moderately in May.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.33 and $17.43 spot.
What you need to know about the economy and markets
Mexico's inflation surprised to the downside in May, with a monthly decline of -0.21% and a deceleration of the annual rate to 3.94% from levels above 4% previously, supported primarily by a larger-than-expected contraction in the non-core component (-1.65% monthly), particularly in energy and agricultural products. Meanwhile, core inflation remained resilient, with a monthly advance of 0.22% and an annual rate of 4.19%, reflecting pressures still present in services.
Our Take
The reading reinforces the inflationary moderation trend, though with a mixed composition. While headline inflation shows a deceleration, this is largely due to volatile factors such as electricity tariffs and some agricultural products, while core inflation continues to show persistence, especially in services. In this regard, the balance for monetary policy remains one of prudence, as the disinflation process advances but not uniformly, suggesting Banxico should maintain a cautious approach toward future moves in the benchmark rate.
China's trade surplus widened in May to $105.4 billion, broadly surpassing expectations and reaching its highest level in four months, driven by solid performance in both exports and imports. Exports grew 19.4% annually, accelerating from the prior month and reaching a historical high, in a context where companies have front-loaded orders amid energy price pressures from the Middle East conflict. Imports increased 27.4% annually, also above expectations, reflecting the impulse of policies aimed at strengthening domestic demand.
Our Take
The report suggests a combination of external and internal factors behind China's trade dynamism. On one hand, the strong export growth appears to be influenced by front-loading effects, as well as a favorable base comparison (May 2025 was a depressed month due to tariff tensions with the US) rather than a structural improvement in global demand, which could imply some normalization going forward. On the other, the greater dynamism of imports points to an incipient rebound in domestic demand, in line with government efforts to stimulate the economy.
After Monday saw the Middle East go through its most dangerous moment since Washington and Tehran agreed to a ceasefire in April, Israel and Iran have agreed to halt mutual attacks for the time being, following a call for de-escalation by President Trump. Tehran warned it will resume its offensive against Israel if it continues attacking Hezbollah in Lebanon. Meanwhile, the US president reiterated that an agreement to end the war with Iran could be reached in "two or three days" and that the strategic Strait of Hormuz would reopen immediately.
Our Take
Israel's attacks in Lebanon remain a key friction point, as Iran has long stated that any peace deal with the US must include an end to the fighting in Lebanon. Concerns about rising inflation and interest rates are at the forefront of traders' attention.
Germany's industrial production registered in April 2026 its first monthly advance since last November, growing 0.4% compared to March. The rebound was driven primarily by construction, which advanced 2.4% monthly, while the automotive and electrical equipment sectors reported sharp declines. New orders in manufacturing fell 3.8% monthly in April, with foreign orders contracting more than 4% and domestic orders close to 3%. On an annual basis, production fell 0.55%.
Our Take
The advance formally breaks a several-month negative streak, but the underlying data do not admit an optimistic reading. The improvement is insufficient to provide significant relief and the overall picture still shows a stagnant German industry over the past four months. The recovery rests almost entirely on construction, a seasonal component linked to fiscal stimulus in infrastructure, while manufacturing continues to find no floor.
The NFIB (National Federation of Independent Business) Small Business Optimism Index retreated 0.6 points in May 2026 to stand at 95.3, below the market consensus of 96.0 and its 52-year historical average of 98.0 for the third consecutive month. The Uncertainty Index rebounded 3 points from April to stand at 91. On the labor market, the percentage of small business owners reporting unfilled job openings fell 5 points from April to 29%, the lowest level since May 2020. On the prices front, the net percentage of owners raising average selling prices remained at elevated levels, more than double its historical average.
Our Take
The May reading confirms a trend of gradual but persistent deterioration in business sentiment among small businesses in the United States, which contrasts with the resilience narrative prevailing in financial markets. The report also shows that AI optimism is not proving sufficient to offset the impact of higher costs and economic uncertainty facing many US small businesses.
Corporate News
In May 2026, ASUR recorded 5.6 million total passengers across its three geographies, a 1.6% year-on-year decline resulting from divergent dynamics across regions. Mexico retreated 4.2%, with international falling 10.0%, Cancún as the main drag with -11.1% in the international component and -8.1% in total, and domestic advancing 1.3%. Puerto Rico recorded a 3.7% decline, pressured by domestic (-4.4%). Colombia was the only positive segment with a 6.6% advance.
Our Take
The report extends the deteriorated pattern already visible in Q1 2026, with Mexico and Puerto Rico revenues falling 4.3% and 4.7% respectively. The 10.0% decline in Mexico's international traffic in May is the most concerning signal in the report: Cancún concentrates around 48% of the group's total revenues and its international traffic accumulates -2.3% for the year, pointing to discretionary travel demand toward the Mexican Caribbean remaining under pressure in a high-fuel environment and lower spending propensity in North American source markets.
OpenAI announced Monday that it has confidentially submitted its initial public offering application to the SEC, with a possible debut for fall 2026. The company completed a US$122 billion funding round in March at a valuation of US$852 billion, currently surpassed by Anthropic which was valued at US$965 billion in its latest round. The company also plans a secondary share sale to employees in the coming weeks ahead of the public debut. OpenAI plans to invest around US$600 billion in AI infrastructure through 2030, according to information provided to investors cited by Bloomberg.
Apple presented at its Worldwide Developers Conference the relaunch of Siri under the name Siri AI, built in part with Google technology but preserving the company's privacy standards. The new assistant will function as a personalized chatbot with the ability to act on data from the user's applications. Tim Cook, who hands over the role to John Ternus on September 1, presented the relaunch as the foundation for a new generation of products including new wearables. However, Apple's shares fell following the announcement and the company acknowledged that Siri AI will not be available on iPhone, Apple Watch, or iPad in the European Union due to privacy regulatory restrictions.
Our Take
The negative stock reaction to Apple's announcement reflects a dynamic that has become recurring for the company. The market no longer awards a growth multiple for the promise of AI, but instead demands evidence of adoption and monetization. Apple has unique structural advantages that no competitor can replicate in the short term. The problem is that the promise of converting those advantages into AI revenues has been two years behind initial expectations.
The to-do list
Monitor oil throughout the day: Israel and Iran agreed to halt mutual attacks following Trump's call, and Brent sheds toward $93, though Tehran warns it will resume the offensive if Israeli attacks in Lebanon continue.
Analyze Mexico's inflation data: the moderation to 3.94% annually is good news, but the core at 4.19% shows persistence in services and suggests Banxico will remain cautious in its next rate decision.
Tonight, prepare red chilaquiles with shredded chicken, the dish that never fails on a weeknight and practically makes itself.
Dedicate 20 minutes to a stretching or Pilates routine at home, the body appreciates movement in the middle of such a dense week.
Today's quote…
"The future belongs to those who believe in the beauty of their dreams."
— Eleanor Roosevelt
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
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