Private consumption in Mexico likely grew 0.5% and 0.1% monthly in March and April, respectively
If confirmed by the early indicator data, consumption would return to positive territory after the monthly declines in January and February.
Markets and Stocks
US futures were retreating in the morning in what could be the first time the Nasdaq declines in six weeks. The global bond market sold off simultaneously across all geographies amid the confluence of accelerating inflation, no Hormuz solution, and the Trump-Xi summit closing without concrete commitments on the conflict. The US 10-year Treasury yield was rising toward 4.54%, the highest in approximately a year, and the UK 10-year gilt advanced to 5.16%, the highest since 2008, amid the political crisis in the United Kingdom. The Japanese 30-year bond touched 4% for the first time since 1999. South Korea's Kospi fell 6.1% on profit-taking in Samsung and SK Hynix. Warsh formally assumes the Fed presidency today. The Trump-Xi summit closed with the announcement of an order for 200 Boeing aircraft, below market expectations, and with no agreement on Iran. Cerebras closed its first day of trading with a gain of 68% at US$311 per share.
Key points
US industrial production beats expectations and rises 0.7% in April.
Trump's visit to China concludes without major announcements.
Global bond sell-off intensifies on inflationary fears.
Japan's producer prices rise to three-year highs.
Political uncertainty increases in the United Kingdom.
Jerome Powell's cycle as Federal Reserve Chair concludes today.
For the rest of the day, the interbank exchange rate (pesos per dollar) could trade between $17.28–$17.40 spot.
What you need to know about the economy and markets
The Early Private Consumption Indicator (IOCP) suggests that consumption in Mexico maintains moderate growth but with signs of deceleration. For March 2026, an annual increase of 1.6% and a monthly increase of 0.4% are estimated, while for April growth would moderate to 0.5% annually and 0.1% monthly. In levels, the index would reach 111.8 points in March and 111.9 in April, reflecting a marginal advance in the short term.
Our Take
The data point to resilient but decelerating private consumption, consistent with an environment of reduced economic momentum. The slowdown between March and April suggests that households are beginning to moderate their spending, possibly due to slower income growth. Even so, the fact that consumption remains in positive territory indicates that it continues to be a key support for economic activity, though still with a certain cooling bias heading into the second quarter.
In April, US industrial production advanced 0.7% monthly, reversing the 0.3% decline of March, with manufacturing up 0.6% and utilities rising 1.9%, while mining retreated 0.1%. Within manufacturing, the 3.7% jump in motor vehicles stood out, while chemicals and plastics moderated the gain with declines of 0.9% each. Capacity utilization stood at 76.1%, still 3.3 percentage points below its historical average (1972–2025), reflecting a margin of slack that persists in the industrial sector.
Our Take
The recovery in industrial and manufacturing production is a welcome signal in a cycle where the US labor market is showing signs of stagnation and consumption faces the double headwind of 3.8% inflation and elevated rates. However, the global context calls for caution, as a single month of rebound does not necessarily confirm a sustained recovery trend — particularly when industrial inventories remain elevated and external demand stays weak.
US President Donald Trump's visit to China has concluded without meeting the expectations markets had placed on the meeting. Although Trump and Xi Jinping staged cordiality and announced advances toward "strategic stability" between both countries, investors were expecting concrete results that did not materialize. The visit's balance looks more diplomatic than economic.
Our Take
The summit left no major headlines or concrete outcomes, with both powers showing positive intentions and joining efforts on aspects each considers important for both. However, investors had been expecting specific announcements on Iran and the reopening of the Strait of Hormuz. Additionally, controversial topics such as Taiwan, AI chips, and the possibility of extending their trade agreement were addressed only superficially.
In today's session, investors are selling government bonds worldwide, pushing borrowing costs to multi-year highs from Japan to the United States, amid growing fear that inflation driven by the war in Iran will force central banks to maintain higher interest rates. In the United States, the 2-year Treasury yield rose to 4.06%, a level not seen since March 2025. Japan's 30-year yield reached 4% for the first time since 1999. A political crisis in the UK pushed the 30-year gilt yield to a 28-year high.
Our Take
The massive bond sell-off deepened as Brent crude at times surpassed US$109 per barrel, compounding concerns generated by two consecutive US inflation reports and the ongoing conflict between the US and Iran. Alongside bets for more Federal Reserve rate increases, expectations of monetary tightening in Japan are also gaining momentum.
Japan's producer prices recorded an annual increase of 4.9%, accelerating from the upwardly revised 2.9% of the prior month and surpassing analyst consensus which had anticipated 3.0%, the highest annual growth rate since May 2023. On a monthly basis, the index advanced 2.3%, the largest monthly variation in more than twelve years, driven by an external energy and commodity shock.
Our Take
The data do not reflect an internal overheating of Japan's economy, which continues to grow below its potential, but rather the direct transmission of the global energy shock caused by the war with Iran to an economy that imports virtually all of its oil and natural gas.
The United Kingdom faces a growing political leadership dispute. Prime Minister Keir Starmer is going through one of his most politically delicate moments. The resignation of Health Minister Wes Streeting and the possible departure of Andy Burnham, Mayor of Manchester, to challenge Starmer for the leadership have opened a new internal crisis in the Labour Party that is unsettling investors.
Our Take
The market fears a shift to the left and an increase in public spending and borrowing. The UK's economic, fiscal, and political situation is very complicated and nobody seems capable of presenting a credible plan to repair public finances and ensure growth.
Jerome Powell closes his tenure at the helm of the Federal Reserve this Friday, May 15 — a period marked by the fight against high post-pandemic inflation and by the open and repeated tensions with US President Donald Trump since his return to the White House. The market is already preparing to welcome his successor, Kevin Warsh.
Our Take
The new era of the Fed raises as many questions as answers: how Warsh will navigate the White House relationship, whether Powell's continued presence on the board will create friction, and how quickly a divided committee will find its equilibrium under new leadership. These questions will take time to resolve.
Corporate News
Trump announced during the Beijing summit that China agreed to buy 200 Boeing aircraft, what would be the first significant purchase of US aircraft by China in nearly ten years. However, the market had been expecting between 300 and 500 aircraft. Boeing shares were falling more than 5%. The recent history of Chinese agreements with Boeing, including a US$77 billion commitment in 2020 that never materialized, adds skepticism about the deal coming to fruition.
Applied Materials, the largest US semiconductor manufacturing equipment supplier, reported second-quarter results beating expectations and delivered guidance for the third quarter well above consensus forecasts. CEO Gary Dickerson noted that AI growth will contribute to more than 30% growth in its semiconductor equipment business for the calendar year, with gross margins at their highest level. The most significant data point for investors is that customers are providing eight-quarter forecasts, offering greater visibility.
Cerebras Systems closed its first day of trading on the Nasdaq at US$311 per share, a 68% advance over its IPO price of US$185, reaching a market valuation of approximately US$95 billion. The stock opened at $350, touched a high of $386, and then moderated gains over the course of the session. The company raised US$5.55 billion in the largest US technology IPO since Uber in 2019.
The to-do list
Take a look at the latest Nvidia reports, next week it reports its results, in what would be the last member of the "Magnificent 7" to publish its figures.
Close all of today's pending matters, next week starts with Warsh at the Fed and markets in uncertainty mode.
This weekend, go do something physical that isn't the gym, a long walk through Coyoacán or an outdoor yoga class does good after such a dense week.
For sports fans, today the NBA conference semifinals continue: Cleveland vs. Detroit; Minnesota vs. San Antonio.
Choose this weekend the next book on your list, Fridays are good for deciding without rush what you want to read over the coming weeks.
Today's recommendation…
To close the week in Mexico City, Cancino is always a safe bet: sourdough, good wines, and the relaxed atmosphere that a Friday calls for after a week of summits, bond market highs, and central banks changing leadership. Unpretentious and full of flavor.
Monitor
Bolsas / Exchanges
S&P 500
7,438
-1.20%
Nasdaq
29,184
-1.70%
Dow Jones
49,707
-0.90%
IPyC
69,120
-0.10%
Monedas / FX (Foreign Exchange)
USD/MXN
17.3510
0.80%
EUR/MXN
20.1558
0.40%
EUR/USD
1.1627
-0.40%
Índice DXY
99.22
0.40%
Tasas / Exchange Rates
Treasury 2 años
4.07
7.5 bp
Treasury 10 años
4.56
10.1 bp
TIIE 3 meses
6.58
2.0 bp
M Bono 10 años
9.17
0.0 bp
Commodities / Commodity Markets
Petróleo (Brent)
108.21
2.40%
Oro
4,547
-2.20%
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