US industrial production expands just 0.1% in May.
Growth shows a sharp moderation after April's 0.9% advance, a figure that was revised upward by two tenths.
Markets and Stocks
Markets are trading with marked optimism, with futures advancing more than 1.0% in what would be the largest bullish open in weeks, following the announcement of a preliminary agreement between Washington and Tehran to extend the ceasefire for 60 days, begin negotiations on Iran's nuclear program, and reopen the Strait of Hormuz, formally signed on Friday, June 19 in Geneva. WTI plunges 5.2% to US$80 and Brent to near US$83, its lowest level since early March. The 10-year Treasury yield sheds to 4.45%. Global markets were also trading with optimism, with the Nikkei advancing 5.0%, the Kospi 5.2%, and the European Stoxx 600 surpassing its all-time high. The week's events include various monetary policy decisions, among them the FOMC meeting on Wednesday, the first under Warsh; the Bank of Japan on Tuesday; the Bank of England on Thursday; and the formal signing of the US-Iran agreement in Geneva on Friday. Today the G7 also kicks off in Évian-les-Bains, France.
Monitor
Bolsas / Exchanges
S&P 500
7,526
1.20%
Nasdaq
30,262
2.00%
Dow Jones
51,752
1.00%
IPyC
67,941
0.00%
Monedas / FX (Foreign Exchange)
USD/MXN
17.1954
-0.10%
EUR/MXN
19.9561
0.40%
EUR/USD
1.1613
0.40%
Índice DXY
99.48
-0.30%
Tasas / Exchange Rates
Treasury 2 años
4.04
-4.2bp
Treasury 10 años
4.45
-3.2bp
TIIE 3 meses
6.54
2.0bp
M Bono 10 años
9.03
0.0bp
Commodities / Commodity Markets
Petróleo (Brent)
83.09
-4.90%
Oro
4,345
3.00%
Key points
The United States and Iran announce an agreement to open the Strait of Hormuz and end the war.
Industrial production grew again in April in the Eurozone, though at a slower pace than in March.
The US could impose a 100% tariff on French wine if it does not eliminate its digital services tax.
G20 GDP growth remains stable at 0.7% in the first quarter.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.12 and $17.25 spot.
What you need to know about the economy and markets
In May, US industrial production advanced 0.1% monthly, a moderation from April's 0.9% increase, with manufacturing unchanged and mining rising 1.3%, while utilities retreated 0.4%. Capacity utilization stood at 76.2%, still 3.2 percentage points below its historical average (1972-2025), reflecting a margin of slack that persists in the industrial sector.
Our Take
The moderation, though still in positive territory for industrial and manufacturing production, is a signal of continuation of the cycle where the US labor market shows signs of dynamism and consumption faces the double headwind of inflation and elevated rates. However, the global context calls for caution, as a second month of increases does not necessarily confirm a sustained recovery trend, particularly when industrial inventories remain elevated and external demand stays weak.
The United States and Iran announced on Sunday a comprehensive peace agreement that immediately ends military operations on all fronts, including Lebanon, after nearly four months of hostilities. Although the details of the agreement have not been made public, information reported by the media suggests that Iran will reopen the Strait of Hormuz in exchange for the United States lifting the naval blockade, exempting Iranian oil from sanctions, and releasing part of Iran's frozen assets, while the future of its nuclear program will be negotiated over the next 60 days. The official signing of the text is scheduled for Friday, June 19 in Geneva.
Our Take
After closing the deal, it will now be time to put it into practice, which may prove to be the most complicated part. Both parties harbor deep mutual distrust and neither wants to offer the other any opportunity to declare itself the winner. The agreement still needs concreteness, execution, and follow-through.
Eurozone industrial production registered an increase of 0.1% in April compared to the prior month, representing a deceleration from the 0.4% growth recorded the prior month. Compared to April of last year, it rose 0.3%. By component, monthly performance showed heterogeneous behavior, with consumer goods production standing out.
Our Take
The region's industry has held up relatively well so far, despite the new energy crisis unfolding. The monthly increase in April marks the third consecutive, nothing extraordinary but not catastrophic either, given events in the Middle East.
The United States could apply a 100% tariff on American imports of French wines and champagne if the country does not eliminate its 3% sales tax on technology products. This tax consists of a levy on gross revenues generated in France by large technology companies.
Our Take
This is not the first time the Trump administration has sought to take retaliatory measures against the French wine industry. Already in 2019 it raised the possibility of imposing heavy tariffs in response to the then-new tax, and additionally in January of this year Trump said he would use a 200% tariff on French wines and champagne to force Macron to join his Peace Council initiative.
GDP growth in the G20 zone remained unchanged at 0.7% during the first quarter of 2026, according to provisional estimates. Growth accelerated in most countries, with particular intensity in South Korea and Brazil. Only five economies showed weakness, with Mexico standing out in this group.
Our Take
G20 GDP expansion reflects a situation of heterogeneous evolution among the bloc's members. The global aggregate is sustained by the dynamism of Asian emerging economies (India, China, Indonesia, South Korea), while advanced economies show weak traction and the Eurozone enters negative territory (-0.2%).
Corporate News
The US government ordered Anthropic to block access by foreign users and organizations to its most advanced AI models, including Mythos, citing national security concerns, according to Bloomberg reports. The measure comes days after Anthropic launched Claude Fable 5, described as a model with capabilities similar to Mythos but with additional safeguards, and released a limited version of Mythos only to a small group of cybersecurity and infrastructure advocates. The order also affects Anthropic's IPO in preparation, which plans to go public this fall at a valuation close to one trillion dollars and counts Google and Amazon as strategic investors.
Nvidia announced the commercialization of corporate bonds with maturities from 2 to 30 years, seeking to raise at least US$20 billion in its first bond market issuance since June 2021 when it raised US$5 billion. The funds will be used for general corporate purposes, including repayment and refinancing of existing debt.
Fox Corp. agreed to acquire Roku in a cash-and-stock transaction that values the streaming platform at approximately US$22 billion including debt, at a price of US$160 per share. The combination unites Fox's content, including the free service Tubi with more than 80 million active users, with Roku's more than 100 million platform subscribers, creating the third-largest US television operator by audience behind Netflix and YouTube. Roku shares advance approximately 1% in pre-market trading after Friday's 20% jump when Bloomberg reported the talks; Fox shares fall 13% on the dilution and acquisition cost.
The to-do list
Monitor oil and markets throughout the day: the US and Iran announced a comprehensive peace agreement on Sunday that includes the reopening of the Strait of Hormuz, though details are not yet public and the official signing is scheduled for Friday, June 19 in Geneva.
Follow the implementation of the agreement closely: mutual distrust between Washington and Tehran is deep and the text still needs concreteness, execution, and follow-through, so any sign of stumbling in the first days will be read under a microscope by markets.
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 green enchiladas with chicken, a classic that never fails.
Dedicate 30 minutes to going for a bike ride; starting the week by moving your body makes a difference for everything ahead.
Today's quote…
"Optimism is the faith that leads to achievement."
— Helen Keller
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
Important Notice: This document is confidential and intended solely for the use of clients and prospective clients of Kapital México Grupo Financiero (“Kapital”). The opinions contained herein reflect exclusively the views of the analysts as of the date of preparation, and such analysts do not receive any compensation from persons other than Kapital. Kapital hereby declares the following:
Kapital does not hold investments in the securities covered by this analytical report that represent one percent (1%) or more of its securities portfolio.
Analysts may hold investments in certain issuers whose securities are the subject matter of this Analytical Report.
No member of the Board of Directors, Chief Executive Officer, or senior officer of Kapital or of the entities comprising Kapital, occupying positions immediately below such level, holds any relevant position in the issuers of the securities covered by this analytical report.
During the past twelve months, where applicable, there have been changes in the direction of the opinions expressed in the analytical reports regarding the issuers covered by this analytical report, in accordance with prevailing economic, political, and social market conditions.
The contents of this document are provided for informational purposes only and do not constitute an offer or investment recommendation. Kapital assumes no liability for decisions made based on this information. Past performance does not guarantee future results.
