Mexico Stocks Near All-Time High as Peso Hits 17.15 on CPI

The S&P/BMV IPC rallied 0.83% to close at 71,478.81 on Friday, recovering from a volatile session that saw the index plunge to an intraday low of 70,329.29 before staging a powerful reversal. The intraday swing of nearly 1,150 points underscored how sensitive Mexican equities remain to US macro data: the release of softer-than-expected US CPI at 8:30 a.m. ET transformed what had been a defensive opening into a broad-based buying opportunity. The session high of 71,558.73 came within 43 points of Wednesday’s all-time high of 71,601.35. On the week, the IPC gained 0.95%, its fifth positive week in six. This is part of The Rio Times’ daily coverage of Mexican markets and Latin American financial news.

América Móvil was the story of the week, surging 9.85% after delivering Q4 2025 results that exceeded market expectations. The telecom giant reported net profit of MXN 19,134 million — a 369.7% year-over-year increase — driven by a halving of financing costs and a 3.4% rise in revenue to MXN 244,897 million. EBITDA grew 4.2% to MXN 94,928 million, representing a 38.8% margin. The company added 2.8 million postpaid subscribers in the quarter, with Telcel closing December with 84.7 million mobile users in Mexico. For the full year 2025, América Móvil’s net profit reached MXN 82,819 million — a 261.6% increase over 2024 — positioning Carlos Slim’s flagship for what analysts expect to be continued outperformance as Mexico’s digital infrastructure spend accelerates.

Friday’s session leaders included Grupo Carso (+5.04% to 129.20), Grupo Financiero Inbursa (+4.55% to 46.67) and Alsea (+3.11% to 56.97) — a Slim-heavy list that reflected the carry-over enthusiasm from América Móvil’s earnings beat. The laggards were relatively mild: Coca-Cola Femsa slipped 1.79% to 194.06, Orbia fell 1.18% to 20.86, and Sigma Foods eased 1.09% to 18.19. Breadth was neutral, with 122 issues advancing against 122 declining and 16 unchanged. Other notable weekly performers included Grupo Carso (+7.5%), Genomma Lab (+6.6%), Vesta (+6.02%) and Televisa (+5.15%), suggesting broad participation beyond the Slim conglomerate.

The Mexican peso appreciated 0.36% on Friday to close at 17.15 per dollar, according to Banco de México data, extending its winning streak as the US dollar weakened on the back of the cooler-than-expected CPI report. The peso opened at 17.21 and steadily strengthened through the session as the inflation data reinforced expectations for Federal Reserve rate cuts. On the week, the peso gained 0.55% and is now down approximately 14.5% in year-over-year terms (dollar weakness), making it one of the strongest-performing currencies in the global emerging market complex.

The primary catalyst was the US January CPI, which showed headline inflation decelerating to 2.4% year-over-year — the slowest pace since May 2025 and below the 2.5% consensus. Core CPI came in at 2.5%, its lowest annual reading since April 2021. Monthly headline CPI rose just 0.2%, below the 0.3% forecast, helped by a 1.5% drop in energy prices and a notable 0.2% shelter increase that extended the multi-year cooling trend. The Dollar Index edged down 0.04% to 96.88, near its 52-week low of 95.55 set on January 27. Markets are now pricing two Fed rate cuts this year — one in June and another in September — with a growing probability that June could come even earlier.

WTI crude settled fractionally higher at $62.89 per barrel (+0.08%), essentially flat as US-Iran diplomatic uncertainty offset bearish inventory data — US crude stockpiles rose 8.5 million barrels in the latest week, the largest build in months. Oil posted its second consecutive weekly loss as the IEA tempered its demand outlook and OPEC+ signaled a potential resumption of output increases from April. Gold April futures settled at approximately $5,046 per ounce (+1.98%), reclaiming the $5,000 level on the back of the softer inflation print and persistent central bank buying, with the People’s Bank of China extending gold purchases for a fifteenth consecutive month.

Friday’s session produced a decisive bullish candle after a dramatic intraday reversal from 70,329 to a close at 71,478.81 — near the session high of 71,558.73. The pattern closely resembles a bullish engulfing formation, with the close above the prior session’s open and high, confirming strong buying conviction after Thursday’s 1% decline. Price sits above all major moving averages, with the EMA cluster providing dynamic support in the 69,100–70,500 zone. The 6-month moving average (blue trendline) continues its steep ascent from the September 2025 lows, reflecting the powerful structural uptrend.

The Bollinger Bands have expanded, with the upper band at approximately 71,479 now acting as the immediate ceiling. Price is trading at the upper band, which typically signals either a continuation in strong trends or short-term exhaustion. The Ichimoku cloud sits well below current prices, reinforcing that the medium-term trend is solidly bullish with ample support in the 66,400–67,300 zone.

Momentum indicators remain constructive but increasingly extended. The RSI reads 66.05/65.25, approaching but not yet in overbought territory (70+). The close alignment between the primary and smoothed RSI lines suggests trend stability rather than divergence. The MACD histogram stands at 109.91 with the MACD line at 1,411.01 versus the signal at 1,301.09 — a healthy positive spread that has been widening since early January, confirming the uptrend has momentum. However, the histogram has flattened slightly from its peak, suggesting the pace of acceleration is moderating even as the direction remains firmly bullish. A sustained close above the all-time high of 71,601.35 would open the path toward the 72,000–73,000 psychological zone.

Banxico unanimously paused its easing cycle at 7.00% on February 5 — the first hold after 13 consecutive cuts that brought the rate down from 11.25% in early 2024. The decision reflected growing concern over inflation pressures from Mexico’s new tariff regime (up to 50% on non-FTA imports effective January 1), the IEPS tax increases on cigarettes and sugary drinks, and the 12% minimum wage increase. Banxico extended its inflation convergence timeline, now projecting the 3% target will not be reached until the second quarter of 2027 — a notable pushback from its previous forecast of H2 2026. The next decision is March 26, where markets are split on whether the board will resume cuts or hold again pending clearer tariff pass-through data.

Mexico’s January inflation validated the pause. INEGI reported headline CPI at 3.79% year-over-year, up from 3.69% in December and the highest since September. Core inflation accelerated to 4.52% — the highest since March 2024 — driven by services (particularly restaurants, mobile phone services and packaged tourism) and goods (cigarettes surged 14.51% on the IEPS hike, while limes jumped 21.21%). Banamex projects that tariffs on non-FTA imports will filter through gradually to merchandise inflation over 2026, though the peso’s appreciation and low producer price inflation (1.5% annual in January) should provide partial offsets.

The US January CPI report was the dominant external catalyst on Friday. Headline inflation decelerated to 2.4% — the lowest since May 2025 and down sharply from 2.7% in December. Core CPI at 2.5% marked the smallest annual increase since April 2021. The monthly headline reading of 0.2% undershot the 0.3% consensus, helped by a 1.5% decline in energy prices and notably subdued shelter costs (+0.2%). For Mexico, the softer US print is unambiguously constructive: it weakens the dollar (supporting the peso), bolsters the global rate-cutting narrative (channeling flows into high-carry EM assets), and reduces external inflation import risk. Markets are now pricing two Fed cuts in 2026, with June as the probable starting point and a second move in September.

The USMCA review looms as the key structural risk for Mexico’s markets in the months ahead. While the current tariff regime is manageable — USMCA-compliant goods remain exempt from the new MFN duties, and the peso’s strength is cushioning import costs — any disruption to the trilateral framework would trigger a sharp repricing of Mexican risk assets. Vanguard projects GDP growth rebounding to approximately 1.4% in 2026, supported by US demand, the World Cup tourism boost, and continued nearshoring FDI. However, the IIF is less optimistic at 0.9%, citing tariff uncertainty and infrastructure bottlenecks. The carry-trade spread of over 300 basis points (Banxico 7.00% vs. Fed 3.50–3.75%) continues to anchor peso demand, though Banxico itself expects this differential to narrow as both central banks ease through the year.