IPC Mexico Up 2.27% on Iran Peace Rally

01 Market Snapshot

02 Equities

The IPC Mexico today surged +2.27% to 68,610.72, extending its winning streak to five consecutive sessions as the global Iran de-escalation rally swept through emerging markets. The S&P 500 gained 2.91%, the Dow jumped 1,125 points, and the Nasdaq surged 3.83% — all posting their best sessions since May. This is part of The Rio Times’ daily coverage of the Mexico stock market IPC today and Latin American financial markets.

The catalyst was a Wall Street Journal report that President Trump told aides he was willing to end military operations in Iran even without the Strait of Hormuz fully reopening, followed by unconfirmed reports that Iranian President Pezeshkian was open to ending the conflict with security guarantees. The IPC opened at 67,214.83, gapped higher through mid-morning, and touched an intraday high of 68,954.97 before a modest late-session pullback. The five-day rally has now recovered most of March’s drawdown, leaving the index just 4.9% below its all-time high of 72,111.41 set on February 12.

As noted in Friday’s mining-led rebound, the MACD line had already turned positive, and Monday’s continuation confirms the bullish momentum shift. Peñoles, which led Friday’s session with a +5.53% gain, likely extended on the commodity rally alongside Grupo México, the index’s largest constituent by market cap.

03 Banxico’s Surprise Rate Cut

Banxico surprised markets on Thursday, March 26, by cutting the benchmark rate 25 basis points to 6.75% — resuming the easing cycle after a February pause. The vote split 3–2, with Governor Victoria Rodríguez, Gabriel Cuadra, and Omar Mejía supporting the cut, while Galia Borja and Jonathan Heath voted to hold unchanged.

The decision came just two days after INEGI reported headline inflation surged to 4.63% in early March — the highest since late 2024 — driven by a 32% spike in tomato prices and an 8.3% jump in fruit and vegetable costs. Core inflation, however, remained essentially flat at 4.46%. Banxico’s communiqué cited the weakness of economic activity (GDP contracted 0.9% in January), the exchange rate, and the degree of monetary restriction already implemented as justifying the cut.

The central bank raised its inflation forecasts for three of four quarters in 2026 but maintained that headline inflation will converge to the 3% target by Q2 2027. Banco Base analyst Gabriela Siller said she was surprised by the decision, noting that inflation risks remained tilted to the upside. Banxico signaled this may be the final cut in the current cycle, with the board indicating it will “evaluate the timing for additional reference rate adjustments” — language analysts interpret as a signal that the easing phase is drawing to a close.

04 Currency & Trade

The peso weakened past MXN 18 per dollar on Friday following the surprise rate cut, trading near 18.12 — its weakest since early December. The currency had fluctuated between 17.72 and 18.15 over the past week. The rate cut reduced the peso’s carry advantage, while geopolitical risk and a stronger dollar added pressure.

The USMCA review formally began on March 16, with Mexico’s economy ministry presenting the results of consultations with 30 sector roundtables. The conclusion: the trade pact is an asset that should be preserved and modernized, not renegotiated. Mexico faces 25% tariffs on non-USMCA-compliant goods (roughly 16% of exports), plus sectoral duties on steel, aluminum, and copper. USMCA-compliant goods — about 84% of bilateral trade — remain tariff-free. The July 1 formal review start date looms as the next major trade risk event.

Trade tensions with China escalated further as Beijing declared it has the right to retaliate against Mexico’s tariffs on more than 1,400 Chinese products implemented at the start of the year. As covered in the latest Latin American Pulse, the Mexico-China trade friction is increasingly intertwined with the USMCA review dynamics.

05 Political & Domestic

President Sheinbaum pivoted to a secondary-legislation approach on electoral reform after her coalition suffered a defeat in the Chamber of Deputies earlier in March, where Green Party and Labor Party allies defected on a constitutional amendment requiring a two-thirds supermajority. The slimmed-down bill — focused on capping lawmaker perks and reducing electoral council bonuses — passed the Senate but still needs lower house approval.

Economic activity contracted 0.9% in January, manufacturing employment has fallen for 35 consecutive months, and the USMCA review looming in July adds a layer of trade uncertainty. Despite these headwinds, Mexico’s IPC has rallied 25% over the past year, driven by nearshoring optimism and Banxico’s easing cycle that has brought rates down from 11.25% to 6.75% since March 2025.

06 Technical Analysis — IPC Daily

Monday’s session produced a strong bullish candle, opening at 67,214.83 — near the session low — and rallying to a high of 68,954.97 before closing at 68,610.72. The candle has a small upper shadow, indicating some profit-taking near the 69,000 psychological level, but the close near the highs signals sustained buying conviction.

The MACD reads 282.51 / −492.26 / −774.77. The histogram remains negative but the MACD line has turned sharply positive and is converging rapidly toward the signal line — a bullish crossover appears imminent. RSI stands at 54.95 on the weekly and 41.10 on the daily. The weekly RSI above 50 is constructive, while the daily at 41 still has significant room to run before reaching overbought territory. The index has reclaimed the Ichimoku cloud and is pressing against the upper Bollinger Band, suggesting the volatility expansion favors continuation.

07 Key Levels

08 Global Context

Wall Street surged on Iran peace hopes — Dow +2.49% (+1,125 pts to 46,341), S&P 500 +2.91% (6,528), Nasdaq +3.83% — all posting their best day since May. The moves came after Trump told aides he was willing to end military hostilities even if the Strait of Hormuz remains shut, plus unconfirmed reports Iran’s president was open to ending the war with guarantees.

Brent May futures settled at $118.35 — highest close since June 2022 — capping a record +60% monthly gain. WTI fell $1.50 to $101.38. The May-June Brent spread inversion suggests de-escalation premium decay. The S&P 500 still closed March down 5.1% — worst month since last March — and Q1 down 7.33%, the worst since June 2022.

09 Looking Ahead

Banxico’s next meeting is May 15, and the central bank has signaled it may be done cutting. The key question is whether the March 26 cut was the last in the cycle or whether continued economic weakness forces one more. Second-half March inflation data, due in the coming days, will be critical — another upside surprise would confirm the easing cycle is over.

The USMCA formal review starts July 1. Mexico’s economy ministry favors preservation with modernization; the Trump administration has sent mixed signals, with the president at times calling the pact “irrelevant.” Non-USMCA goods still face 25% tariffs, and the China-Mexico trade friction adds complexity. As analyzed in last week’s IPC market report, the peso’s trajectory through the review period will be driven more by trade headlines than by Banxico‘s rate path. The FOMC meets April 28–29, where oil-driven inflation complicates the Fed’s rate path — Goldman has pushed its first-cut call to September.

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