Mexico IPC at All-Time High; USMCA Withdrawal Risk Emerges

The Mexican equity market extended its record-breaking run on Wednesday, with the IPC rising 0.46% to 71,601.35 — its 13th all-time closing high in 2026. The previous record had been set just two days earlier at 71,509.45 on Monday, February 9. Year-to-date gains now stand at 11.3%, with the February advance alone reaching 5.8%, underscoring the strength of the rally that has made the Mexican bourse one of the best-performing major indices globally. This is part of The Rio Times’ daily coverage of Mexican markets and Latin American financial news.

The session was dominated by América Móvil (AMXB), which surged 4.87% to MXN 20.25 on massive volume of 71.5 million shares — by far the day’s most traded name. The move came on the back of spectacular Q4 2025 results reported the prior evening: net income of MXN 19.13 billion, up 369.7% YoY, driven by lower financing costs and robust service revenue growth. Full-year 2025 net income reached MXN 82.8 billion, a 261.6% leap. The telecom giant added 2.8 million postpaid subscribers in Q4 alone, with Brazil, Colombia, and Mexico leading the expansion. EBITDA rose 4.2% to MXN 94.9 billion, with the margin holding at 38.8%.

Beyond América Móvil, Grupo México (GMEXICOB) gained 2.25% to MXN 206.26, buoyed by elevated copper prices ($6.00/lb), while OMA (OMAB) hit a new all-time high at MXN 277.30 (+1.15%). The airport operator’s record reflects ongoing optimism about Mexican aviation traffic and nearshoring-driven travel demand. Fresnillo (FRES) topped the broader market’s gainers with a 10.49% surge, riding the wave of record gold prices ($5,109) and surging silver ($83.60).

On the losing side, Becle (CUERVO) fell 4.27% to MXN 19.04, extending its consumer discretionary weakness. Bolsa Mexicana de Valores A (BOLSAA) dropped 4.13%, while Volaris (VOLARA) shed 3.82%. The most notable loser among blue chips was Grupo Financiero Banorte (GFNORTEO), which fell 2.25% to MXN 203.43 on volume of 7.18 million shares — the heaviest decline in the financial sector and a warning sign that rate-sensitive names are starting to price in the possibility that Banxico’s cutting cycle may stall longer than expected.

The peso showed its typical resilience, finishing essentially flat at 17.18 per dollar after absorbing two conflicting shocks. In the morning, US nonfarm payrolls came in at 130,000 — nearly double the 70,000 consensus — while the unemployment rate fell to 4.3% from 4.4%. The stronger labor data initially pushed USD/MXN higher toward 17.22 as Fed rate cut expectations cooled. But the peso clawed back its losses through the session, aided by the carry trade premium (Banxico at 7% vs Fed at 4.25-4.50%) and lingering structural inflows from nearshoring.

Locally, Banxico sub-governor Jonathan Heath made headlines by stating that a rate cut could come “as early as March” if inflation data continues to cooperate. This was noteworthy: Heath had been the lone dissenter on the Board, consistently voting against cuts, so his dovish pivot signals a potentially unified Board ready to resume easing. Banxico paused its cutting cycle on February 5 — its first hold since June 2024 — at 7.00%, after 12 consecutive cuts that brought the rate down from 11.00%.

Industrial production data released during the session provided a mixed picture. INEGI reported that December activity rose 0.2% MoM (seasonally adjusted), marking three consecutive months of moderate growth. On a YoY basis, December output surged 2.4% — the first positive annual reading after 20 consecutive months of declines or zero growth. Construction led the charge at 6.6% YoY, followed by utilities at 3.9% and manufacturing at 1.3%. However, full-year 2025 output contracted 1.3%, the worst showing since the pandemic year of 2020, with mining plunging 6.5% and manufacturing down 0.5%.

Late in the US session, Bloomberg reported that President Trump is privately asking aides why he should not withdraw from the USMCA trade pact — the very deal he signed during his first term. The report injected a fresh dose of uncertainty ahead of the mandatory July 1, 2026 joint review. While no formal decision has been made, and a White House official called the reports “baseless speculation,” the threat alone was enough to stall the peso’s recovery and add a risk premium to Mexican assets. Automakers have been lobbying aggressively to preserve the agreement, warning that even prolonged uncertainty could deter North American investment.

Bond markets reflected cautious optimism, with the 10-year government bond yield falling 4 basis points to 8.74% and the 20-year declining 2 bps to 9.15%. The rally in local rates suggests markets are positioning for a resumption of Banxico’s cutting cycle, despite the February pause. EUR/MXN slipped 0.23% to 20.40, reflecting broad peso strength relative to the euro.

Oil prices rallied sharply on US-Iran tensions, with WTI climbing 1.58% to $64.97 and Brent gaining 1.34% to $69.72. Gold futures surged 1.54% to a new high of $5,108.61, extending the precious metal’s extraordinary 2026 run. The combination of geopolitical risk, dollar weakness, and central bank buying continues to support gold, with silver following at $83.60.

The IPC’s daily chart tells the story of a powerful, sustained uptrend that shows no signs of exhaustion — yet. Price opened at 71,461.00, dipped to 70,594.14 in early trade, then rallied to close near the session high at 71,601.35 — a bullish candle with a long lower wick suggesting buy-the-dip demand. The index is trading well above all moving averages and firmly above the Ichimoku cloud, with the Tenkan-sen and Kijun-sen both rising and offering dynamic support in the 68,735–68,904 zone.

The MACD remains firmly bullish, with the MACD line at 1,424.93 versus the signal at 1,242.11, producing a positive histogram at 182.82. This confirms the strength of the underlying trend even as the histogram’s magnitude has moderated from its mid-January peak — a normal pattern in a mature uptrend rather than a reversal signal. The daily RSI reads 67.97 on the standard setting and 66.82 on the smoothed — approaching overbought territory at 70 but not yet there, leaving room for further upside before technical exhaustion becomes a concern.

Key support zones include 69,956 (the most recent consolidation base), 69,592 (the Tenkan-sen area), and the Ichimoku cloud top near 68,735. The 200-day SMA sits far below at approximately 61,021 — a testament to how extended the rally has become from its long-term average. On the upside, with the index in price discovery at all-time highs, resistance is defined by round numbers: 72,000 is the next psychological target, with extensions toward 73,000 if momentum sustains.

USD/MXN’s daily chart paints the picture of a dramatic peso appreciation trend that has pushed the pair to levels not seen since early 2024. The pair opened at 17.1794, spiked to 17.2239 intraday on US jobs data, then settled back to close at 17.1885 (+0.05%) — a neutral doji-like candle that reflects the session’s indecision. Price is trading well below the descending Ichimoku cloud and beneath all major moving averages, confirming the entrenched downtrend from the 19.50+ October 2025 highs.

The RSI at 37.00 (standard) and 32.55 (smoothed) is hovering in oversold territory — a potential warning sign for bears. While oversold readings can persist in strong trends, the smoothed RSI’s dip below 33 suggests the pair may be due for a mean-reversion bounce or consolidation before the next leg lower. The MACD is in bearish territory with the histogram at 0.00707 (barely positive) and the MACD/Signal lines at -0.15941/-0.10648, indicating weakening downside momentum even as the broader trend remains bearish.

Key support lies at 17.0356 (the lower Bollinger Band on the daily and close to recent lows). A break below 17.00 — a major psychological level — would open the door toward the 16.80–16.90 zone. Resistance is layered: 17.27 (the Tenkan-sen area), 17.34–17.35 (recent swing highs), and the Kijun-sen near 17.46. The Ichimoku cloud top sits far overhead at approximately 17.74, reinforcing just how deeply oversold the pair has become relative to its medium-term structure.

Verdict

The IPC’s 13th record of the year may seem like cause for celebration, but the Wednesday session exposed cracks beneath the surface. The advance was disproportionately driven by one name: América Móvil alone contributed the lion’s share of the index’s 329-point gain, with its 4.87% jump reflecting earnings exceptionalism rather than broad equity appetite. Strip out AMX and the session looks far more muted. Meanwhile, Banorte’s 2.25% decline — the sector bellwether — signals that financial stocks are repricing the risk that Banxico‘s easing cycle may stall beyond March, particularly after the strong US payrolls report reduced the room for the Fed to cut first.

The technical picture remains constructive but stretched. The daily RSI at 67.97 is one strong session away from overbought territory, and while the MACD histogram is positive, it has been declining from its January peak — a pattern of weakening momentum even as price makes new highs. This type of bearish divergence between price and momentum does not guarantee an imminent reversal, but it does suggest the rally’s pace is unsustainable. The IPC is now 17.3% above its 200-day SMA, an extreme extension that typically precedes either a consolidation or a sharp pullback.

The peso’s resilience in the face of a hotter US jobs print and the USMCA withdrawal trial balloon is remarkable — and potentially complacent. USD/MXN’s daily RSI at 37/32.55 is the most oversold reading in the current cycle, yet the pair barely bounced. The carry trade — Banxico at 7% vs the Fed at 4.25–4.50% — continues to anchor the peso, but the USMCA overhang is the kind of slow-burning risk that does not show up in volatility measures until it is too late. If Trump escalates from private musing to public rhetoric about withdrawal, the peso could gap weaker rapidly. The July 1 mandatory review is now less than five months away, and any extended uncertainty could freeze foreign direct investment decisions.

Heath’s dovish signal on a March cut is a potential catalyst. If the February inflation data (the next two quincenal readings) comes in below 3.77%, it would validate his timeline and likely push both the IPC and the peso higher in the near term. Conversely, any upside surprise in inflation would vindicate the February pause and could trigger a sell-the-news reaction, particularly in rate-sensitive names like Banorte. The rescheduled US CPI (February 13) is the more immediate event: a hot print would strengthen the dollar, test the peso’s support at 17.27, and potentially stall the IPC’s rally. Industrial data provides a constructive backdrop — December’s 2.4% YoY growth ends a 20-month slump — but the full-year 2025 contraction of 1.3% confirms that Mexico’s industrial base remains structurally weak, with manufacturing growth of just 1.3% far below what a nearshoring thesis would imply.

The base case: IPC momentum intact but narrowing, peso fundamentally supported but facing tail risk from USMCA, and oil/gold dynamics broadly positive. Near-term, the US CPI print on Thursday is the key binary event for both the peso and the broader EM complex. The market is priced for perfection — and in that environment, the risks are asymmetrically to the downside.