Bank of Mexico announces its monetary policy decision today at 1pm
Our expectation is that it will leave the interest rate unchanged at 7.0%
Markets and Stocks
US futures were retreating in the morning, reversing the moderate optimism of previous days. Brent rose 3.5% toward $105 per barrel and WTI recovered toward $93, after Iran formally ruled out negotiating on the US 15-point plan. The futures market exhausts safe-haven options with gold falling again below $4,450 and Treasuries retreating, with the 10-year yield rising toward 4.37%. Finally, continuing unemployment claims fell to their lowest level since May 2024.
Key points
Contradictory messages continue regarding progress to end the war in Iran.
US initial jobless claims rise by 5 thousand.
German consumer confidence weakens.
The Bank of Norway holds rates unchanged but expects to raise them at upcoming meetings.
OECD warns about impacts on global GDP and inflation if the armed conflict between the US and Iran extends.
Monitor
Bolsas / Exchanges
Activo
Valor
Variación_pct
S&P 500
6,583
-0.90%
Nasdaq
24,106
-1.10%
Dow Jones
46,342
-0.80%
IPyC
68,089
0.00%
Monedas / FX (Foreign Exchange)
Activo
Valor
Variación_pct
USD/MXN
17.8163
0.30%
EUR/MXN
20.5598
0.20%
EUR/USD
1.1538
-0.20%
Índice DXY
99.88
0.30%
Tasas / Exchange Rates
Activo
Valor
Variación_pct
Treasury 2 años
3.93
4.7 bp
Treasury 10 años
4.37
4.6 bp
TIIE 3 meses
7.11
2.0 bp
M Bono 10 años
9.45
0.0 bp
Commodities / Commodity Markets
Activo
Valor
Variación_pct
Petróleo (Brent)
107.70
5.40%
Oro
4,440.00
-1.50%
What you need to know about the economy and markets
Today at 1pm, the Bank of Mexico announces its monetary policy decision. The expectation is that, for the second consecutive meeting, the authority will keep its benchmark interest rate unchanged at 7.0%. In addition, it is likely they will adjust upward their inflation estimates for 2026 due to the recent inflation trajectory and the risks from the armed conflict between the US and Iran.
Our take
Banxico should opt for prudence and leave its interest rate unchanged in today's announcement. The rebound in headline inflation to 4.63%, with core inflation around 4.50% and 20 fortnights above the upper threshold of the target range, plus possible price impacts from the geopolitical situation, are sufficient reasons for the central bank to opt for a "wait and see" strategy.
Persistent tensions in the Middle East and contradictory signals coming from the US and Iran regarding their ceasefire negotiations are undermining investors' appetite for risk. Iran's latest comments seem to suggest some willingness on Tehran's part to negotiate an end to the war if its demands were met. For its part, Pakistan has assured that it is acting as intermediary in indirect talks between both parties, with the help of Turkey and Egypt.
Our take
This tug-of-war surrounding the talks, and the possibility, though still remote, of an agreement to end the conflict, continues to set the course for oil prices and financial markets as a whole. While headlines point to a more constructive tone, markets still do not know which signals to trust and which to act on. When analyzing the objectives of the United States, Israel, and Tehran, reconciling all these points will be very difficult.
US initial jobless claims increased by 5 thousand to reach 210 thousand in the week ending March 21, in line with expectations. Meanwhile, continuing claims fell to 1.82 million in the week ending March 14, the lowest figure in nearly two years.
Our take
The variation during last week was very modest. Thus, despite an environment marked by geopolitical volatility, elevated energy prices, and restrictive monetary conditions, companies are showing a marked reluctance to lay off their skilled workers.
The German consumer confidence index, produced by the GfK research firm, fell in its preliminary April reading to -28.0 points from -24.8 points in March, also coming in below the -27.0 points analysts had expected. The April preliminary is the lowest reading of this index since March 2024.
Our take
The report reflects that the German consumer fears that the slow recovery of Europe's largest economy could be derailed if the Middle East conflict is prolonged.
The Central Bank of Norway kept its official interest rate at 4.0%, in line with forecasts, although it has made clear that it expects to raise it again in the coming months amid the rebound in inflation and increased economic uncertainty.
Our take
While the monetary tightening applied in recent years has helped cool the economy and contain prices, inflationary pressures persist. Furthermore, uncertainty is greater than usual due to the war in the Middle East, which has increased volatility in energy and financial markets, with sharp rises in oil and gas, which could continue to push prices higher.
The OECD, in its interim report on the 2026 Economic Outlook, warns that in an adverse scenario where oil and gas prices significantly exceed the baseline due to the war between the US and Iran, global GDP could be around 0.5% lower toward the second year of the conflict, while inflation would be approximately 0.7 percentage points higher in the first year.
Our Take
The armed conflict is testing the resilience of the global economy, which had been driven by favorable financial and fiscal conditions and growing demand for artificial intelligence technologies. The closure of the Strait of Hormuz and damage to energy infrastructure have generated a sharp rebound in energy prices, disrupting the global supply of both energy commodities and other critical raw materials such as fertilizers, which raises costs, depresses demand, and adds inflationary pressures.
Markets and Stocks
Aside from the conflict in Iran, Ukraine launched drone attacks that disrupted up to 40% of Russia's oil export capacity, according to Reuters estimates. The episode adds an additional layer of tension to the energy market at a time when strategic inventories are already being reduced by the IEA's coordinated releases.
Corporate News
As part of its Walmex Day 2026, Walmex announced a capex investment program of approximately 43 billion pesos for the current year, a 10% increase compared to 2025. The allocation is distributed mainly toward the remodeling and maintenance of existing stores. In addition, the company reaffirmed its commitment to open more than 1,500 stores between 2025 and 2029, with Bodega Aurrera as the main growth vehicle, and estimated that new stores will contribute between 1.5% and 1.7% to total sales growth in 2026.
Our Take
The investment program combines three simultaneous bets that reflect the maturity of its model: densification of the existing network, aggressive expansion in discount formats through Bodega Aurrera, and supply chain automation to reduce service costs. In addition, the 10 billion peso buyback proposal, complemented by a possible extraordinary dividend, reinforces the commitment to shareholder returns in a year where macroeconomic visibility is limited.
The German consumer goods group Henkel agreed to acquire Olaplex, the hair care brand that developed a following for its repair treatments, in a deal valued at US$1.4 billion. Olaplex shares were up nearly 50% in pre-market trading.
A Los Angeles jury found Meta and Google guilty of designing social media platforms that are addictive and harmful to the mental health of young people, a verdict that could serve as a precedent for thousands of similar cases pending across the country. Both companies will have to pay $6 million to the plaintiff.
US insurers Equitable Holdings and Corebridge Financial announced an all-stock merger that would value the combined business at US$22 billion. The transaction would create one of the largest life insurance and retirement groups in the United States.
The to-do list
At 1pm, full attention to the Banxico announcement: no changes expected at 7.0%, but read the statement and the new inflation estimates carefully.
Monitor oil: Brent rose again toward $105 following Iran's rejection of the peace plan, volatility is not easing.
Follow messages from Pakistan, Turkey, and Egypt as intermediaries: they are the most reliable clue as to whether there is real negotiation or just diplomatic noise.
It's Thursday, a good day to get ahead of everything possible before the end of the week.
Go for a walk or exercise today; a week this loaded with contradictory signals weighs more than it seems.
In the evening, read something unrelated to markets and rest, there is more important data tomorrow and it's worth arriving fresh on Friday.
Quote of the day
"Prudence is not indecision, it is the wisdom of waiting for the right moment."
Benjamin Graham.
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