Mexico IPC Drops 1.56% to 67,313; Peso Sheds 3.3% Weekly

01 Market Snapshot

02 Key Movers

Friday’s selloff was broad-based, with declining issues outnumbering advancers across most sectors. The pressure was led by export-dependent and financial names sensitive to global risk-off flows. Earlier in the week, some commodity-linked names like Grupo México and Peñoles had shown resilience on rising metal prices, but by Friday the negative momentum had become indiscriminate. Laura Torres, of IMB Capital Quants, noted the session reflected “rotation toward safer assets amid heightened international uncertainty.”

A notable structural event was the IPC rebalance announcement on March 6: Volaris (VOLAR) is expected to replace Becle (CUERVO) in the index effective March 23, according to Banorte analysts. Becle dropped to position 36 in the ranking while Volaris advanced to 35. This marks the first constituent change of 2026 and could drive rebalancing flows in the coming weeks.

03 Market Commentary

Friday’s session capped one of the most punishing weeks for Mexican assets in recent memory. The S&P/BMV IPC fell 1.56% to 67,313.50 on the day, extending the weekly loss to 5.22% — the steepest weekly decline since mid-2024. The index opened at 68,167.87, briefly tested 68,366.87 on the upside before sellers took control, driving it to a low of 67,270.41. The close at 67,313.50 was near the session low, signaling no buyer interest into the weekend.

The scale of the weekly damage was striking: the IPC shed over 4,100 points from Monday’s open at 71,487 to Friday’s close, putting the index 5.97% below its 2026 high of 71,601.35 while still 4.97% above the year’s low of 64,141.36. The selloff was driven by three converging forces: the Iran war escalation disrupting energy markets, weak US employment data raising recession fears, and portfolio rebalancing toward safe havens.

Despite the carnage, analyst consensus remains constructive for the medium term. As of March 4, four major firms maintained positive year-end targets: BX+ at 73,432, Banorte at 73,500, Kapital Grupo Financiero at 73,390, and Monex at 73,000. The catalysts they cite — T-MEC renegotiation, lower interest rates, FIFA World Cup demand in Q2–Q3, and solid corporate fundamentals — remain intact but are being overshadowed by the geopolitical shock.

04 Currency

The peso ended the week battered. Banxico’s FIX rate was set at 17.7962 on Friday, while the market close came in near 17.80–17.81 pesos per dollar. Intraday, USD/MXN touched a high of 17.91 before pulling back. On the day, the depreciation was marginal at 0.08% (1.34 centavos per El Financiero), but the weekly picture was far more damaging: the peso lost 3.32% — 57.16 centavos — its worst weekly performance since July 2024.

Structural headwinds persist. Mexico’s January trade deficit hit a record $6.48 billion, while core inflation remains sticky. The Secretaría de Hacienda projects an average 2026 exchange rate of 19.3 pesos per dollar, suggesting official expectations of further depreciation. Citi’s latest survey projects a year-end rate of 18.18 — more optimistic but still implying further peso weakness from current levels. The DXY closed at 98.92, its strongest weekly close since mid-January on safe-haven flows, though Friday’s dismal US payrolls report (−92,000 jobs) tempered the rally.

05 Technical Analysis

Daily (1D):

Friday’s candle was a large red body (open 68,167.87, high 68,366.87, low 67,270.41, close 67,313.50), closing near the session low — a bearish continuation pattern. The candle sliced through the lower portion of the Bollinger Band envelope, with price now sitting well below all visible moving averages. The bands are widening to the downside, confirming increasing volatility in the bearish direction.

The MACD has turned sharply negative: the MACD line sits at 593.83 (still positive but collapsing), the signal at 44.25, and the histogram has flipped decisively negative at −549.58. This represents a significant momentum shift from the deeply positive readings seen just two weeks ago. The RSI reads 55.41 with the slow component at 39.04 — the fast RSI has fallen rapidly from overbought levels above 70 in late February but has not yet reached oversold territory, suggesting further downside is possible before a technical bounce. The 200-day SMA sits at approximately 62,148.53, providing structural support roughly 7.7% below the current close.

06 Forward Look

Iran War and Oil Shock:

With Brent surging past $100 on Sunday (peaking above $114), the BMV faces an acute challenge. Mexico is a net oil exporter via Pemex, but the economy is heavily import-dependent for refined fuels and industrial inputs. Higher oil prices benefit fiscal revenues but amplify inflationary pressures, complicating Banxico’s easing cycle. The Strait of Hormuz closure has stranded roughly 200 tankers and disrupted 20% of global oil supply, with Kpler analysts warning prices could reach $150 if the disruption persists.

US Macro Calendar — Week of March 10:

Key releases include US CPI (Wednesday), housing data (Thursday), and Q4 GDP second estimate plus PCE deflator (Friday). Friday’s payrolls shock (−92,000 jobs) reopened the Fed rate-cut narrative — markets now see a potential June cut — which could provide some relief to the peso if confirmed by softer inflation data. However, hot CPI readings would push cuts further back and pressure EM currencies.

IPC Rebalance and T-MEC:

The BMV announced the first IPC rebalance of 2026 on March 6, with Volaris (VOLAR) replacing Becle (CUERVO) effective March 23. This may generate modest rebalancing flows. Meanwhile, the T-MEC renegotiation remains a medium-term catalyst for Mexican equities — a favorable outcome would significantly boost confidence in export-oriented sectors.

Global Contagion:

Asia’s Monday rout — Nikkei −7%, KOSPI −8% (circuit breaker triggered), S&P 500 futures −1.7% — signals further downside risk when the BMV reopens Monday. The VIX at 29.49 (+24%) reflects elevated fear. The peso, already at multi-week lows, faces additional pressure from higher oil-driven inflation expectations and capital flight from EM assets.

Verdict

The IPC’s 5.22% weekly collapse and the peso’s worst weekly slide since mid-2024 represent a decisive break from the constructive narrative that dominated Mexican markets through February. The index has fallen 5.97% from its 2026 high of 71,601, though it remains above its YTD low of 64,141 and well above the 200-day SMA at 62,149. The MACD histogram has flipped negative at −549.58, confirming the momentum shift, while the RSI at 39.04 (slow component) is approaching but has not yet reached oversold territory.

With Brent above $100 and Asian markets in freefall, the BMV faces significant opening risk Monday. The peso’s 3.32% weekly loss and record January trade deficit add to the pressure. However, four major firms still project 73,000–73,500 for year-end, and the structural catalysts — T-MEC, World Cup, rate cuts — remain in place. The question is whether the geopolitical shock derails these expectations entirely or creates a buying opportunity at lower levels.

Bias: BEARISH — the 5.22% weekly loss, negative MACD flip, and global contagion risk outweigh the constructive medium-term outlook. A recovery above 68,515 (R2 / MA cluster) with VIX below 25 turns bias Neutral. A break below 64,141 (2026 YTD low) targets the 200-SMA at 62,149.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. All data sourced from BMV, TradingView, Investing.com, Banxico, El Financiero, Milenio, Infobae, TradingEconomics, El Cronista, and other public sources. Verify all figures independently before making investment decisions.

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