Mexico’s IPC Surges 1.59% to 69,702 as Banxico Rate Cut Fuels Rally Toward 70,000

01 Market Snapshot

02 Equities — Rate Cut Euphoria Continues

The IPC Mexico today posted a commanding 1.59% gain to close at 69,702.02, adding 1,091.30 points in a session that saw buyers in control from the open. This is part of The Rio Times’ daily coverage of the Mexican stock market and Latin American financial markets.

The index opened at 68,597.24 — which also marked the session low — and climbed steadily throughout the day to reach a high of 69,928.49 before settling just below the 70,000 level. The rally extends last week’s momentum, when the IPC surged 2.18% to 65,775 in what was then the best session of 2026 ahead of the Banxico decision. Tuesday’s close of 69,702 puts the index within striking distance of its all-time high of 72,111 reached on February 12.

The rally was broad-based, with heavyweights Grupo Mexico, América Móvil, and Walmex leading the advance. Peñoles — the IPC’s best-performing component over the past year, up over 126% — continued to benefit from elevated precious metals prices. The breadth of the move suggests genuine risk appetite rather than a narrow sector trade, with industrial, consumer, and telecom names all participating.

03 Currency & Monetary Policy

The peso traded near 17.85 per dollar on April 1, weakening modestly as the market continued to digest Banxico’s surprise March 26 rate cut. The central bank reduced its benchmark rate by 25 basis points to 6.75%, unexpectedly resuming the easing cycle after pausing in February at 7.00%. The decision was taken by a majority of the board, citing marked weakness in economic activity during early 2026 as the primary justification.

The move came despite headline inflation spiking to 4.63% in mid-March, well above the 3% target, while core inflation remained stubbornly above 4% at 4.46%. Banxico still projects inflation will converge to its 3% target in the second quarter of 2027. The USD/MXN has traded in a range of 17.10 to 18.15 over the past 90 days, with the peso down from its year-to-date high of 17.10 reached in mid-February. Vanguard forecasts the peso ending 2026 between 17.5 and 18.5 per dollar.

04 Technical Analysis — IPC Daily

The IPC is trading at 69,702.02, pushing into the upper half of its Bollinger Band envelope. The upper Bollinger Band sits near 70,093, which converges with the 70,000 psychological level — making this a critical resistance zone. The index has reclaimed its key moving averages: the 50-day near 67,345 and the 66,846–66,854 area that acted as resistance during the March selloff. The 200-day moving average near 63,756 remains well below, confirming the long-term uptrend is intact.

The MACD at 429.44 is positive with the histogram expanding green — a bullish signal confirming the momentum shift from the March lows. The RSI at 58.91 is bullish and rising but not yet overbought, suggesting room for further gains before the index enters overextended territory. A secondary momentum oscillator at 42.35 is turning higher, supporting the positive bias.

05 Key Levels

06 News in Focus

Banxico Resumes Easing Despite Inflation Spike

Banxico’s March 26 decision to cut rates by 25bp to 6.75% was the session’s key catalyst. The board cited marked weakness in early-2026 economic activity as justification, overriding concerns about mid-March headline inflation at 4.63%. The economic activity index fell 0.9% month-over-month in January — its worst showing since late 2024 — and manufacturing contracted 3%. Analysts from BBVA Research and Banorte now expect at least one additional 25bp cut before mid-year, potentially bringing the rate to 6.50% by year-end as the private survey consensus suggests.

Pemex Debt and Refining Challenges

Pemex faces a critical debt repayment window in April, with approximately US$6.4 billion due in the coming weeks. The government has confirmed it will provide fiscal support, but the state oil company’s total debt exceeds US$100 billion, and production has declined from a 2004 peak of 3.4 million barrels per day to roughly 1.6 million. The Dos Bocas (Olmeca) refinery, originally intended as a cornerstone of Mexico’s energy sovereignty strategy, has averaged only 118,000 barrels per day against its 340,000-barrel nameplate capacity. Pemex’s 2026 budget exceeds MX$260 billion — larger than the budget for the recently created IMSS-Bienestar health program.

USMCA Review and Trade Tensions

Markets are closely watching the upcoming midyear review of the USMCA trade agreement, which underpins approximately 85% of Mexico’s tariff-free trade with the United States. President Sheinbaum has maintained a diplomatic approach with the Trump administration, securing a reprieve from the threatened 30% tariff through a 90-day negotiating window. Mexico has simultaneously imposed tariffs of up to 50% on imports from countries without free trade agreements — primarily targeting Chinese goods — as part of the Plan México industrial strategy aimed at reducing import dependence and creating 1.5 million new jobs.

Growth Outlook Diverges Among Forecasters

Mexico’s growth outlook for 2026 remains uncertain, with estimates ranging widely. Banxico projects 1.6% GDP growth, the OECD forecasts 1.4%, and the IIF sees just 0.9%. All three fall well below the government’s 2.3% budget assumption. Bright spots include Q4 2025 GDP growth of 1.6%, Mexico’s hosting of World Cup matches expected to draw 5 million additional tourists, and the nearshoring trend that continues to strengthen Mexico’s manufacturing position. However, January’s 0.9% monthly contraction in economic activity and a 3% decline in manufacturing suggest the recovery remains fragile.

07 Global Context

Mexico’s rally unfolded against a mixed global backdrop. Elevated oil prices from the Iran conflict present a double-edged sword: they support Pemex revenues but raise inflationary pressures and could complicate Banxico‘s easing trajectory. The Pentagon is reportedly considering deploying 10,000 additional troops to the Middle East, reinforcing the risk of a prolonged energy supply disruption. Meanwhile, the narrowing interest rate differential between Mexico (6.75%) and the United States (where markets now price a 50% chance of a Fed hike by December) is gradually eroding the peso’s carry trade appeal — underemployment at 7.0% and informal employment at 54.8% add to domestic headwinds.

08 Looking Ahead

The IPC faces a significant test at the 70,000 psychological level, which converges with the upper Bollinger Band near 70,093. A clean break above 70,000 would open the path toward the February all-time high at 72,111, while a rejection could trigger profit-taking toward the 67,345 support zone at the 50-day moving average.

Key catalysts to watch: the next Banxico decision (May), where markets will assess whether the central bank continues cutting despite persistent inflation above 4%; any developments on the USMCA review timeline; the April Pemex debt settlements; and the trajectory of oil prices as the Iran conflict evolves. Mexico’s domestic tariff strategy — the up-to-50% duties on non-treaty imports — will begin showing up in import data, offering early signals on whether Plan México’s import substitution goals are gaining traction.

This report was published by The Rio Times. For daily coverage of Latin American markets, read our Latin American Pulse and Brazil Morning Call.