During the first quarter of 2026, Mexico's aggregate supply and demand increased 0.3% quarterly and 5.2% annually. Mexico's economy continued to show a growth composition increasingly supported by consumption and less by investment. Private consumption represented 49.5% of total demand, while gross fixed capital formation reduced its share to 15.2%, below the 15.9% observed in 2025. Additionally, exports of goods and services reduced their relative weight to 27.5%, compared to 28.4% in Q1 2025. In terms of contribution to GDP, which had an annual expansion of 0.2%, private consumption contributed 1.5 percentage points and exports 0.6 points.

Our Take

The figures suggest an economy that continues to depend primarily on consumption to sustain its growth, while investment continues to lose relevance within aggregate demand. The reduction in the share of gross fixed capital formation is consistent with recent data on investment weakness and points to lower expansion of productive capacity.

US President Donald Trump and his Iranian counterpart Masoud Pezeshkian have digitally and remotely signed the memorandum of understanding agreed upon by both nations with the objective of reaching a permanent peace agreement that ends the Middle East conflict. Although not cancelled, the ceremony planned for tomorrow in Switzerland will no longer serve its original purpose, but could serve as the start of definitive negotiations between both countries. The 14-point memorandum initiates a 60-day negotiation period during which Iran will allow free toll-free passage through the Strait of Hormuz.

Our Take

It remains to be seen whether the US and Iran can ultimately reach a definitive agreement and close their differences within the 60-day period starting now. The memorandum of understanding is already in force. While geopolitical risk persists and will continue to be a determining factor in financial market activity, the agreement substantially reduces an extreme risk.

The Bank of England (BoE) considered it appropriate to keep the benchmark interest rate at 3.75%, thus following the script expected by the market, though it highlighted it is prepared to act as necessary to ensure inflation remains on track to reach the 2% medium-term target. The vote was 7-2, with the latter two in favor of a 25 basis point hike. The rate thus remains at the same level since last December.

Our Take

Given the current context of weakness in the real economy and uncertainty around the magnitude and duration of the impact on energy prices, tolerating inflation temporarily above target as part of a return to it is an appropriate way to address the dilemma, provided inflation expectations remain anchored.

US initial jobless claims decreased last week, indicating that the labor market remains in a "low rotation" phase. The decline was 4,000, bringing claims to 226,000 in the week ending June 13. The expectation was for them to hold at 225,000. However, continuing claims, an indicator of the number of people receiving benefits, increased to 1.81 million the prior week.

Our Take

The figures suggest that the labor market continues to show resilience despite the energy price crisis caused by the war with Iran. That view was reinforced by a better-than-expected May employment report, which showed that companies created 172,000 jobs.

Corporate News

Intel shares rise close to 9% following Trump's statements that the company will work with Apple to design and manufacture semiconductors on US territory, in line with the administration's technology reindustrialization policy. The announcement makes Intel a potential beneficiary of Washington's technology protectionism. Simultaneously, Apple CEO Tim Cook mentioned to the Wall Street Journal that the company will raise prices on several products due to the rising cost of memory and storage chips stemming from the structural scarcity of the AI cycle.

The European Commission is prepared to reveal next week its preliminary findings that Amazon Web Services and Microsoft Azure qualify as "gatekeepers" under the Digital Markets Act, with a final decision expected by the end of 2026, according to Bloomberg reports. The investigation was initiated in November 2025 following a series of massive service outages that highlighted the risks of concentration in the cloud market.

Our Take

The potential designation of AWS and Azure as gatekeepers under the DMA is the most relevant regulatory risk for the global cloud ecosystem in the medium term. The interoperability obligations the DMA would impose, such as allowing customers to migrate data between cloud platforms without friction, would reduce the pricing power and margins of both companies' cloud segments in Europe, which represent a growing portion of their total revenues.

The to-do list

  • Follow the market's reaction to the Fed: Warsh debuted with a more concise statement, eliminated forward guidance, and the dot plot points to at least one rate hike in 2026, a more aggressive signal than expected that the market will continue to digest during the day.

  • Watch the details of the US-Iran memorandum: the 14-point text is already in force and opens 60 days of negotiation with free passage through the Strait of Hormuz, though reaching a definitive agreement within that timeframe will be the real challenge.

  • It's Thursday, get ahead of as much as possible before the end of the week and don't leave anything important for Friday afternoon.

  • Tonight there's a match: Mexico vs. South Korea at 7:00pm, prepare something quick before kickoff, some tacos or snacks, and enjoy the Tri's second home game.

  • Dedicate 20 minutes before the match to stretching or going for a walk, enter the game with body and mind clear.

Today's quote…

"A champion is someone who gets up when they can't."

— Jack Dempsey