In January 2026, industrial activity in Mexico recorded a monthly decline of 1.1% with seasonally adjusted figures, while on an annual basis it fell 0.1%. Within its components, electricity generation and supply decreased 1.9% month-over-month, while mining, construction, and manufacturing each declined 1.1%. On an annual basis, construction grew 5.0%, mining 1.0%, and the energy sector 0.6%, while manufacturing fell 1.7%.

Our take

The monthly decline suggests the industrial sector began the year with weakness, particularly due to the downturn in manufacturing, which remains the main engine of industrial activity. However, the positive annual performance of construction and mining indicates that some segments continue to show resilience.

The U.S. economy grew at an annualized rate of 0.7% in the fourth quarter of 2025, according to the second estimate published by the Bureau of Economic Analysis. The figure was revised downward from the initial estimate of 1.4% and represents a significant slowdown compared with the 4.4% growth recorded in the third quarter. The main revision occurred in private consumption. For the full year 2025, the U.S. economy grew 2.1%.

Our take

The downward revision confirms a more pronounced slowdown in economic activity toward the end of 2025. In this context, moderate growth reinforces the view of an economy that is gradually decelerating, although without clear signs of contraction in the short term.

The United States has authorized the temporary purchase of Russian oil to help offset the supply shock resulting from the conflict in Iran in an attempt to stabilize energy markets. The U.S. measure came shortly after Iran’s new Supreme Leader, Mojtaba Khamenei, said that Tehran would continue blocking the Strait of Hormuz.

Our take

The U.S. exemption on purchases of Russian oil, which initially triggered a slight decline in crude prices, is not a radical shift but does ease concerns about short-term supply shortages ahead of the weekend.

The war has entered its fourteenth consecutive day as attacks by Israel and the United States against Iran continue, with Tehran launching waves of missile and drone strikes in retaliation, targeting oil infrastructure in several surrounding Middle Eastern countries. U.S. President Donald Trump threatened Iran with new attacks after the new leader of the Islamic Republic adopted a defiant tone.

Our take

The diminishing hopes of a quick resolution to the war have completely transformed the outlook for global interest rates. Traders are now pricing in only one Federal Reserve rate cut this year, likely in December, compared with two cuts expected at the end of February. In the case of the European Central Bank, the market is now forecasting a rate hike in July and assigns a 70% probability to another increase in December.

Industrial production in the Eurozone fell 1.5% month-over-month in January, far below market expectations, which had anticipated growth of 0.6%. On an annual basis, production declined 1.2%, also below forecasts. The contraction was widespread among the main economies in the bloc, including Germany, Italy, and Spain, while the decline was intensified by a sharp drop in activity in Ireland.

Our take

The fall in industrial production suggests that the recovery of the European manufacturing sector remains fragile and vulnerable to external shocks. The recent rise in energy prices associated with the Middle East conflict could worsen cost pressures, particularly in energy-intensive industries. In this context, European industry could face a prolonged environment of weakness, limiting the region’s economic momentum in the coming months.

The International Energy Agency has cut its forecast for oil supply growth one day after a historic release of emergency reserves, as the war in the Middle East disrupts flows through one of the world’s most critical oil transit routes. The agency now expects oil supply to grow by 1.1 million barrels per day this year, a sharp reduction from the 2.4 million barrels previously projected.

Our take

This outcome was expected, as the Strait of Hormuz, a vital route that carries roughly one fifth of global oil flows, remains largely closed, with Iran attacking cargo vessels and key energy infrastructure across the region.

Markets and Stocks

International markets traded with a mixed tone. Europe posted slight gains, while sentiment in Asia was mixed, with some currencies such as the euro and yen weakening amid rising energy costs. Meanwhile, gold and silver prices remained relatively stable, trading near 5,113 and 84 dollars per ounce, respectively.

Corporate

Adobe announced that its CEO Shantanu Narayen will step down. The stock fell about 8.5% in pre-market trading. The company also issued revenue guidance that failed to ease investor concerns about its competitive positioning against AI-powered content generation tools that threaten its traditional business model.

Uber announced the relaunch of its robotaxi service in Las Vegas in partnership with Motional, a company backed by Hyundai Motor.

Ulta Beauty issued guidance for the current year that came in at the lower end of market expectations, sending the stock down about 8.8%. The cosmetics company faces increased competition, including the expansion of Target’s beauty line, as well as a consumer showing greater selectivity in discretionary spending.

The to-do list

  • Prepare next week’s agenda with a focus on Wednesday’s Federal Reserve meeting and Thursday’s decisions from European central banks, which will be the most relevant market events in weeks.

  • Review portfolio composition in light of the breakdown in correlations between bonds and equities, assessing whether hedging strategies remain appropriate in the current environment.

  • Monitor any signals of negotiation or de-escalation in the conflict in Iran over the weekend, given the direct impact on market openings on Monday.

  • Take the weekend to read about the stagflation dynamics of the 1970s, the most relevant historical episode for understanding the environment markets may begin to price in.

  • This Sunday the 2026 Academy Awards will take place. The evening promises to be unusually competitive, with Sinners and One Battle After Another leading the nominations and Irish actress Jessie Buckley favored for Best Actress for Hamnet. A good excuse to disconnect from the markets for a few hours.

Quote of the day

For tonight in Mexico City, the restaurant Contramar in the Roma neighborhood is an ideal place to close the week with a good fish dish and a glass of white wine.

If you prefer something more relaxed, the bars along Orizaba Street offer the perfect atmosphere to leave the noise of the market behind at the office.