US-Iran escalation keeps the Strait of Hormuz on edge.
The US and Iran exchange military attacks over the weekend and both countries offer opposing versions of whether the Strait of Hormuz remains open to commercial navigation.
Key points
The Federal Reserve faces a key week, marked by Warsh's testimony before Congress and the publication of inflation reports.
China publishes foreign trade figures for June later today.
Markets watching the start of the US corporate earnings season for the second quarter.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.44 and $17.54 spot.
US stock market futures are operating with moderate declines this Monday after the US and Iran exchanged new attacks over the weekend, with the S&P 500 retreating 0.3% and the Nasdaq 100 falling 0.8%, also contagioned by a sharp semiconductor sector equity selloff that originated in South Korea. Oil rebounded strongly, with Brent at times approaching $80 before trimming gains to trade around $78.57 (+3%), while WTI rose 3.5% to $73.90, following contradictory versions about the status of the Strait of Hormuz. In fixed income, the 10-year Treasury yield advanced two basis points to 4.58%, while 2-year yields touched their highest level since early 2025 amid speculation that the Fed could be forced to raise rates due to the rebound in energy prices.
Monitor
Bolsas / Exchanges
S&P 500
7,595
-0.30%
Nasdaq
29,713
-1.10%
Dow Jones
52,858
-0.10%
IPyC
67,109
0.90%
Monedas / FX (Foreign Exchange)
USD/MXN
17.4736
0.10%
EUR/MXN
19.9751
0.30%
EUR/USD
1.143
0.20%
Índice DXY
100.94
0.00%
Tasas / Exchange Rates
Treasury 2 años
4.22
1.7 bp
Treasury 10 años
4.58
0.8 bp
TIIE 3 meses
6.56
2.0 bp
M Bono 10 años
9.04
0.3 bp
Commodities / Commodity Markets
Petróleo (Brent)
79.12
4.10%
Oro
4,065
-1.30%
What you need to know about the economy and markets
Over the weekend, tensions in the Middle East continued to escalate, with the US and Iran exchanging the most intense attacks since the signing of the Memorandum of Understanding (MOU). Additionally, Tehran declared the Strait of Hormuz closed. However, the United States rejected Iran's claim, with President Trump assuring that commercial traffic through the waterway remained open under US protection.
Our Take
Investor and trader confidence deteriorates following the resurgence of geopolitical tensions over the weekend and the contradictory statements about the status of the Strait of Hormuz, which increase speculation about possible supply disruptions. As long as it continues to operate well below its normal traffic, the market will continue to pay a geopolitical risk premium on oil.
Investors will be closely watching Kevin Warsh, who will appear for the first time as Fed chair before the House of Representatives and the Senate, in addresses (Tuesday and Wednesday, respectively) that could offer new clues about the direction of the institution's monetary policy, coinciding with the publication of US consumer and producer inflation figures.
Our Take
If the figures show a deceleration in inflation, especially core inflation, this could lead investors to reduce their rate hike expectations. For his part, during Warsh's testimony, it is unlikely he will say anything substantially different from what he has already communicated in prior days.
Later, at 8:00pm, China's June foreign trade figures will be published. Market consensus anticipates the trade balance will register a surplus of $121 billion, above that observed in May. Additionally, exports are expected to maintain solid annual growth of 18.2%, though lower than the prior month's 19.4%, while imports would increase 24.0% annually, moderating slightly from the 27.4% recorded in May.
Our Take
Expectations point to China's foreign trade continuing to show strength. The high expected pace for imports suggests relatively solid demand for inputs and raw materials, while exports would continue to benefit from the manufacturing sector's competitiveness.
At the corporate level, the Q2 earnings season begins in the US with the accounts of major banks such as JP Morgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs. The key of this season will likely be the forecasts for the second half of the year. After the sharp stock market rallies of recent months, the room to positively surprise is increasingly limited.
Our Take
The market prices in a very favorable scenario and any signal of growth deceleration, margin pressure, or moderation in AI spending could trigger a more intense than usual reaction. In a market trading at all-time highs, doing well is no longer enough; now you have to do better than expected.
Corporate news
Taiwan Semiconductor Manufacturing Co. (TSMC) reported that its quarterly sales grew 36% annually, meeting market expectations and signaling that global hardware demand for artificial intelligence remains intact. The company is the leading chip manufacturer for Nvidia and Apple, and is one of the most closely followed indicators of the AI infrastructure investment cycle.
Our Take
TSMC's results reinforce the thesis of solid structural demand for advanced computing capacity, at a moment when the market penalizes its South Korean peers amid growing fears of overinvestment.
Stellantis shipments grew 10% in the second quarter, driven by growth in North America, as the manufacturer of Jeep and Ram trucks advances with its restructuring plan. This shipment rebound is a favorable signal for Mexico's auto parts supply chain.
Meta Platforms announced an additional $40 billion investment to expand its data center campus in Louisiana, bringing the total planned investment for that complex to more than $250 billion. The announcement reinforces the expectation that the US big tech infrastructure investment cycle for artificial intelligence continues without showing signs of deceleration.
The to-do list
Monitor oil and markets throughout the day: the US and Iran exchanged the most intense attacks since the signing of the memorandum.
It's Monday, start the week with order: define the two or three priorities for the next five days before the day's news noise changes them.
Tonight, prepare chicken tinga tostadas with cream and avocado, quick, tasty, and perfect for starting the week without losing time in the kitchen.
Dedicate 30 minutes to a weights or functional training session, starting the week with strength sets the tone for everything ahead.
Today's quote…
"Success is not achieved with special qualities alone. It is above all a matter of consistency, method, and organization."
— Victor Hugo
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
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