Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-02-18
Michael Barr indicated that interest rates are expected to remain unchanged. He emphasized the importance of monitoring economic indicators before making any adjustments. The comments reflect the current stance of the Federal Reserve under Jerome Powell's leadership. — El Economista, 18 Feb 2026. Read more
Foreign investors continue to show confidence in the Mexican capital markets, with significant participation noted in recent months. The article highlights that this trend reflects a stable economic environment and favorable investment conditions. Analysts suggest that the ongoing interest from abroad is a positive indicator for Mexico's financial landscape. — El Economista, 18 Feb 2026. Read more
Wall Street closed with positive numbers, while the Mexican Stock Exchange (BMV) experienced a decline of 0.28%. The article highlights the contrasting performances of the two markets, emphasizing the positive close on Wall Street amidst the downturn in Mexico's stock market. — El Financiero, 17 Feb 2026. Read more
In the latest weekly auction, the rates for Cetes predominantly decreased as investors await the upcoming minutes from Banxico. The market is closely monitoring these developments, particularly in light of the current economic climate and the decisions made by Banxico Governor Victoria Rodríguez Ceja. — El Economista, 17 Feb 2026. Read more
The Mexican peso showed resilience by appreciating against the dollar during a session characterized by fluctuations. The currency's performance reflects ongoing market dynamics and investor sentiment, as it navigates through various economic challenges. — El Economista, 17 Feb 2026. Read more
The article discusses the inaccuracies in dollar forecasts, highlighting the challenges faced by analysts in predicting currency movements. It emphasizes the role of various economic indicators and geopolitical factors that have contributed to these forecasting failures. The piece also notes the implications for investors and policymakers as they navigate an unpredictable financial landscape. — El Financiero, 16 Feb 2026. Read more
Pemex has successfully placed debt in pesos amounting to 31,500 million pesos, marking its first issuance in this currency in six years. This operation reflects the company's strategy to diversify its financing sources and strengthen its financial position. — El Financiero, 12 Feb 2026. Read more
Banco Nacional de Comercio Exterior (Bancomext) has announced a new strategy aimed at enhancing support for Mexican exporters. The bank plans to focus on sustainable financing and digital transformation to improve its services. President Claudia Sheinbaum emphasized the importance of this initiative for the country's economic growth. — Expansión, 12 Feb 2026. Read more
Recent reports indicate that wage increases in Mexico are surpassing inflation rates. This trend reflects a significant shift in the labor market dynamics, as workers are experiencing better compensation relative to rising prices. The article highlights the implications of this development for the economy and the workforce. — Expansión, 12 Feb 2026. Read more
Mexico Seeks to Refine the USMCA on Specific Trade Issues — Google News, 17 Feb 2026. Read more
Canada and Mexico vow closer economic ties amid Trump trade shake up — Google News, 17 Feb 2026. Read more
Mexico, Canada announce joint economic action plan for a post-USMCA future — Google News, 17 Feb 2026. Read more
Mexico, Canada Strengthen Trade Amid US Tariff Pressure — Google News, 17 Feb 2026. Read more
This week’s trade mission to Mexico the perfect time for Canada to strengthen an economic relationship — Google News, 17 Feb 2026. Read more
Mexico and Canada Strengthen Trade and Security Ties in Meeting with Marcelo Ebrard and Dominique LeBlanc — Google News, 17 Feb 2026. Read more
Canada Economics Brief: Canada and Mexico Sign Preliminary Trade Understanding To Expand Port To Port Trade and Will Also Hold Talks On Security, BNN TV says — Google News, 17 Feb 2026. Read more
‘Tremendous amount of energy’ in Canada-Mexico trade discussions, delegate says — Google News, 17 Feb 2026. Read more
Mexico, Canada Plan Trade Boost with Security Component — Google News, 16 Feb 2026. Read more
Colombian Peso Soars: Constitutional Court’s Landmark Ruling Bolsters Currency Stability – Societe Generale Analysis — Google News, 16 Feb 2026. Read more
Updated: 2026-02-07 by Alexander Dentler
Key Takeaways
Following the December 18, 2025 decision, Banxico's policy rate stands at 7.00%, reflecting a recent cut of 0.25 percentage points. After Banxico's December meeting, the target rate has been held steady at 7.00%, following a cumulative reduction of 0.50 percentage points since the last hike in March 2023. The recent cut represents a strategic response to evolving economic conditions, characterized by lingering uncertainties surrounding both domestic and external factors. As Banxico prepares for its next meeting in 47 days, the focus remains on adapting to the shifting landscape of economic pressures and inflationary expectations.
The Fed's target rate currently stands at 3.62%, following a similar cut of 0.25 percentage points in December. Relative to the United States, Banxico's more aggressive rate stance reflects a proactive approach to managing inflation and economic stability amidst heightened global economic uncertainties. The recent coordination in rate cuts illustrates a shared concern over external economic conditions, yet the substantial rate differential signals diverging monetary policy paths. This dynamic places Banxico in a unique position to leverage policy tools more autonomously, especially as it navigates domestic challenges.
The rate differential is likely to influence capital flows and currency stability in the region. For markets, the significant rate differential could enhance Mexico's appeal to investors, potentially supporting capital inflows. Nonetheless, the heightened concerns surrounding rule of law and security suggest that such advantages may be offset by risks that could deter long-term investment. As Banxico maneuvers through these complexities, the interplay between rate policy and economic fundamentals will remain critical.
The central bank's policy rate is the primary tool for steering inflation and economic activity. Banxico targets 3% annual inflation and adjusts its overnight interbank rate to influence borrowing costs throughout the economy. The rate differential with the United States affects capital flows and exchange rate dynamics — a wider spread can attract foreign investment but may constrain domestic credit. Policy decisions are announced roughly every six weeks following scheduled monetary policy meetings.
Updated: 2026-02-18 by María López
Key Takeaways
With recent shifts in economic indicators, Banxico faces a critical juncture in its monetary policy strategy. Following updates to the yield curve and external economic pressures, our model-based expectations suggest a substantial chance of no action at the upcoming decision on February 5, 2026, with a mean expected change of -11bp. The model points toward likely inaction, with about 58% probability for a hold, which marks a notable shift from previous assessments. The modal bucket indicates a -25bp cut at approximately 39%, highlighting the tension between economic stability and inflationary pressures.
Recent data inputs have added complexity to Banxico's decision-making landscape. New observations in CPI and bond yields indicate a subtle shift, with inflation ticking higher while bond yields reflect some stabilization. These movements are crucial as they inform the central bank's approach to managing inflation and economic growth.
Key economic drivers reveal a mixed bag of influences shaping the policy outlook. Moderate hawkish pressure emanates from the uptick in CPI, while exchange rate dynamics exert a slight dovish pull, influenced by the evolving MXN/USD relationship. The model also highlights the significance of policy uncertainty, particularly in light of ongoing T-MEC negotiations, which could impact trade and investment sentiment. Ultimately, the decision will rely on the committee's broader judgment, considering not just these model mechanics but the prevailing economic narrative.
Ordered Probit Probabilities
| Rate Change | 04 Feb | 05 Feb 2026 | Δ |
|---|---|---|---|
| -50bp | 11.6% | 3.1% | -8.6 |
| -25bp | 46.7% | 38.9% | -7.8 |
| ±0bp | 41.6% | 58.0% | +16.4 |
| +25bp | 0.0% | 0.0% | +0.0 |
| +50bp | 0.0% | 0.0% | +0.0 |
| +75bp | 0.0% | 0.0% | +0.0 |
| E[Δrate] | -17.5 bp | -11.3 bp | +6.2 bp |
Probabilities in %. Modal bin in bold. E[Δrate] = probability-weighted expected change in basis points.
When markets and the public can anticipate how and why the central bank acts, uncertainty falls and policy becomes more effective. Clear communication helps businesses plan investments, households make borrowing decisions, and international investors gauge currency risks. Economists often stress the importance of clarity and traceability — the ability to follow and understand decisions step by step. Without it, rate moves risk being misread, causing volatility instead of stability. With it, policy signals are more credible, anchoring expectations and strengthening the central bank's influence.
Rate-change probabilities are estimated using an ordered probit model with eight macroeconomic and financial drivers: consumer price inflation (CPI), consumer confidence, the 30-day peso/dollar change, the CETES 28-day spread, stock market growth, the yield curve slope (10Y minus 2Y), Mexico's Economic Policy Uncertainty index, and the Fed-Banxico rate differential. The model maps these drivers into probability bins for the next monetary policy decision, ranging from cuts of 50 basis points or more to hikes of the same magnitude. Coefficients are estimated on the historical record of Banxico decisions and their pre-decision data environment. Probabilities update daily as driver series refresh and should be treated as one input among many.
Updated: 2026-02-18 by María López
Key Takeaways
Bond prices as of 2026-02-18 reveal the 10Y-3Y spread at 1.45%, a notable increase of 0.18% from the previous observation. The latest yield curve data reflects a dynamic environment for Mexican government bonds, where the nominal 10Y-3Y spread is currently at 1.45%, up 0.18% from the last observation. The real spread has dipped to 0.31%, indicating potential concerns about real economic growth. Meanwhile, the breakeven inflation spread stands at 1.13%, hinting that while inflation expectations are firm, they are not alarmingly high, allowing for a cautiously optimistic outlook on price stability.
The curve shape suggests a nuanced outlook for monetary policy, with markets pricing in about a 55% chance of a rate cut from Banxico in the near term. The curve shape suggests that the market is leaning toward an easing scenario, with expectations of a rate cut from Banxico gaining traction. However, this outlook appears somewhat at odds with the prevailing economic indicators, including the resilience of the stock market and the stable rate gap with the U.S. Federal Reserve. As investors digest these mixed signals, the need for vigilance becomes paramount, especially as inflation dynamics continue to unfold.
Yield Spread Update
| Spread (10Y−3Y) | 16 Feb | 17 Feb 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.43 | 1.45 | +0.013 | 1.16 |
| Real | 0.30 | 0.31 | +0.010 | 0.87 |
| Inflation | 1.13 | 1.13 | +0.003 | 0.29 |
All values in percentage points. NS-DFM = Nelson-Siegel Dynamic Factor Model filtered estimate.
When investors and businesses trust that monetary policy will remain credible and predictable, long-term interest rates respond more smoothly to central bank signals. Yield curve spreads between long and short maturities serve as a real-time gauge of this alignment: a stable, upward-sloping curve suggests markets expect gradual normalization, while persistent inversions often signal that markets anticipate policy shifts before they are announced. For Mexico, where inflation targeting depends on anchoring expectations across a diverse investor base, the 10-year minus 3-year spread offers a compact summary of whether policy communication is landing as intended.
Yield curve spreads are filtered using a Nelson-Siegel Dynamic Factor Model (NS-DFM) estimated on weekly data. The model ingests 16 synthetic yield curve points — 11 nominal maturities (overnight through 30 years) and 5 real maturities (overnight through 30 years) — fitted via Nelder-Mead optimization on Banxico bond prices. Factor loadings follow the Diebold-Li (2006) Nelson-Siegel parameterization, decomposing each yield curve into level, slope, and curvature components for both real rates and implied inflation. The Kalman smoother extracts filtered spread estimates that track the underlying signal in daily bond market noise.
So…what is this—and why am I doing it?
This project began with a simple question in 2021: how much of the work of producing useful economic information can we hand over to machines? Monitoring Monetary Policy in Mexico is a thought experiment at that frontier. By combining statistical analysis, tailored visualizations, and large language models, it demonstrates how even highly specialized topics—such as Mexican monetary policy—can be made more accessible, relevant, and insightful. Meanwhile, the system is designed to run without human intervention on a daily basis. My role is to set the design; the automation carries it out.
When does data stop being a dump and start being a story?
The initiative builds on my earlier Monitoring Mexico project but has since evolved in important ways. Data is no longer simply displayed; it is analyzed, distilled, forecasted, visualized, interpreted, narrated, and contextualized. Large language models help transform both raw and modeled data into context, turning numbers into stories. In short, raw information is transformed into understanding.
Who’s in charge here—a Raspberry Pi or common sense?
Behind the scenes, the site runs on a Raspberry Pi 5 powered by Python and a library of custom routines. Automation drives much of the process, but human expertise remains essential in designing the explanation and presenting the material. The balance between machine efficiency and human judgment is what makes the project work.
How do we cut through the jargon and keep the signal?
The aim is straightforward: to bring clarity to an area often obscured by technical detail. Monetary policy shapes households, firms, and markets, yet its analysis usually remains confined to experts. By filtering, explaining, and visualizing the data, this project seeks to make that knowledge more transparent and more useful.
Is this the 80/20 rule you learn in business school in the wild?
At its core, the site is both a contribution to public understanding and an exploration of how informational value is created. It is a humble attempt to deliver 80% of the insights of a central bank analysis with 20% of the resources—while also testing what the future of knowledge generation might look like.
What might be new the next time you drop by?
This is very much a work in progress, with new features, analyses, and visualizations added over time. We can now at the brink of generating our very own economic policy uncertainty (EPU) index, and we consider a newsletter. But maybe a chatbot might be more appropriate? Coming back to check for updates is always a good idea. If the site sparks curiosity, fosters dialogue, or simply helps illuminate Mexico’s economic dynamics, it has achieved its goal.
Updated: 2026-02-18 by María López
Key Takeaways
The early-January 2026 CPI release shows headline inflation at 3.83%, comfortably within Banxico's target band of 2%-4%. The early-January 2026 CPI release shows headline inflation at 3.83%, comfortably within Banxico's target band of 2%-4%. This marks a slight increase of 0.07% from the previous month, indicating a persistent but moderate inflationary environment. Despite this upward movement, the current rate sits at the 40th percentile historically, suggesting that while inflation is on an upward trajectory, it remains manageable for the time being. Nevertheless, continued vigilance is warranted as external factors loom larger in economic discussions.
Core inflation, which excludes volatile food and energy prices, stands at 4.58%, reflecting a divergence from headline trends. Core inflation, which excludes volatile components, stands at 4.58%, significantly higher than the headline figure. This recent uptick of 0.07% signals a concerning divergence, as core inflation remains above the 3% target, suggesting underlying price pressures that could influence monetary policy decisions. The persistent upward trend in core inflation—now at the 78th percentile—underscores the complexities the central bank faces in navigating inflation while considering external economic conditions and structural reforms.
Trade prices remain a critical focal point, with export prices notably surging. Trade prices reflect a mixed but concerning sentiment, particularly with export prices rising sharply to 7.05%, a substantial increase of 1.15%. This upward movement signals robust demand in international markets, yet it also raises alarm over potential inflationary spillovers into the domestic economy. Meanwhile, import prices have shown a more modest increase, underscoring the need for a careful assessment of the interplay between domestic inflation and global supply chain dynamics.
| Series | Current | Prev. Forecast | Error | 12M Forecast | Prev. 12M | Revision |
|---|---|---|---|---|---|---|
| Headline CPI | 3.8 | — | — | 4.3 | 4.3 | +0.00 |
| Core CPI | 4.6 | — | — | 4.0 | 4.0 | +0.00 |
| Export Price Index | — | — | — | 3.8 | 3.8 | +0.00 |
| Import Price Index | — | — | — | 3.0 | 3.0 | +0.00 |
All values in percentage points (YoY, seasonally adjusted). "Error" = actual minus previous forecast. "Revision" = change in 12-month outlook since last update. "—" = no prior forecast available.
The Consumer Price Index (CPI) measures changes in the cost of a representative basket of goods and services purchased by Mexican households. Banxico targets 3% annual inflation with a tolerance band of 2%-4%. Core CPI — which excludes volatile food and energy prices — reveals underlying inflation trends that guide monetary policy. Import and export price indices extend the picture by linking Mexico's inflation dynamics to global markets, trade flows, and currency movements.
Headline CPI, core CPI, export prices, and import prices are projected six months ahead using a Vector Autoregression (VAR). The four series are estimated jointly, so each informs the others' forecasts through lagged interactions. Projections update each time new CPI data arrive and may shift materially after revisions.
Updated: 2026-02-06 by Jorge Martínez
Key Takeaways
The latest SHF House Price Index for Q3 2025 reveals a YoY inflation rate of 8.86%, which is about as spicy as a taco on a hot summer day. This inflation rate, reported on July 1, 2025, is comfortably above the historical average, strutting in at the 79th percentile since 2006. In the same breath, house price inflation is outpacing both the headline CPI at 3.69% and the housing CPI at 3.35%, creating a premium of over 5 percentage points in each case. Meanwhile, the DFM nowcast suggests a slight divergence from this observed rate, but let's not throw a piñata just yet; we’ll dig into that shortly.
Now, let’s unravel the mystery of the DFM nowcast, which brings some intriguing twists to our house price saga. The DFM nowcast, standing at 7.29% as of January 1, 2026, is lower than the observed 8.86%, indicating that the model detects downward pressure from auxiliary indicators like mortgage lending and CPI housing. This suggests that while house prices have been on a rollercoaster of inflation, the underlying trend is showing signs of mean reversion or cooling off, which could have implications for those still clinging to the idea of a housing bonanza. In short, the DFM is waving a caution flag, reminding us that even the hottest markets can cool down faster than a soggy tortilla.
Housing is a major household asset and a key store of wealth. Rising prices can lift balance sheets and collateral values, while falling prices can weaken credit conditions and confidence. Housing costs also shape the cost of living and affordability, making house price inflation relevant for both growth and distributional pressures in Mexico.
Updated: 2026-01-23
Key Takeaways
Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. Brent oil prices through December 2025 reveal a disconcerting tale, settling at $61.81, a staggering 15.6% decline year-over-year. This downward trajectory, exacerbated by global supply chain disruptions and fluctuating demand, has cast a pall over Mexico's federal revenues, which hinge significantly on oil exports. With a three-day streak of decline, the implications for Pemex and the Campeche regional economy are as clear as a foggy morning: uncertainty looms large.
Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. Copper, on the other hand, shines like a beacon, currently priced at $11,790.96 and boasting a robust 32.3% increase over the past year. This metal's recent upward momentum—evident in a 9.1% monthly increase—reflects a burgeoning demand from the tech sector and a resurgence in global infrastructure projects. For Mexico's mining sector, particularly in Sonora, this trend offers a silver lining amidst the otherwise turbulent commodity seas.
Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. Corn prices are on a modest ascent, currently at $205.32, with a year-over-year rise of 1.2%. This gentle rise, marked by a 1.8% increase in the last month, paints a picture of stability in an otherwise volatile agricultural landscape. For Mexico's 1.5 million smallholder farmers, this incremental growth brings hope, but the specter of food price inflation still lurks in the shadows.
Commodity prices feed directly into Mexico's inflation pulse and terms of trade. Oil and corn affect energy and food costs, while copper is a proxy for global industrial demand. For policymakers, sharp commodity swings can shift inflation expectations and fiscal balances, making these prices critical to monitor.
Updated: 2026-02-17 by Jorge Martínez
Key Takeaways
The January 2026 IMSS release shows unit labor costs at 3.12%, indicating wages are outpacing productivity. Following January's formal sector wage data, ULC in manufacturing is rising, with a MoM decrease of 0.32 percentage points. This uptick signifies that wages are growing faster than productivity, which could stir the pot for cost-push inflation pressures down the line. At the 72nd percentile, this trend raises eyebrows about competitiveness and cost management in the sector.
Real wages in the formal sector are showing signs of improvement, with manufacturing workers enjoying a robust increase in purchasing power. With real wage growth at 5.61%, households in manufacturing are experiencing tangible benefits, as their purchasing power is on the rise. This positive shift, marked by a 1.54% MoM increase, suggests that workers are gaining ground against the rising costs of living, providing a much-needed cushion in uncertain economic times.
Across sectors, manufacturing is pulling ahead of retail when it comes to real wage dynamics. Manufacturing is outperforming retail, with real wages rising significantly while retail workers are facing a decline in purchasing power, currently at just 1.52%. This divergence highlights a troubling trend in the retail sector, where real wages have been stagnant, potentially leading to increased financial strain for households reliant on this sector.
Unit labor costs (ULC) measure the average cost of labor per unit of output — when wages grow faster than productivity, ULC rises, potentially squeezing profit margins and fueling inflation. In Mexico, where the formal sector employs roughly half the workforce, IMSS-registered wage data captures trends in the formal economy but misses the informal sector's dynamics. Real wages — nominal wages adjusted for inflation — determine household purchasing power and underpin consumer demand. For policymakers, these indicators help balance inflation control, competitiveness, and the economic welfare of Mexican workers.
Updated: 2026-01-19
Key Takeaways
Following the latest quarterly GDP release from INEGI, real GDP growth in Mexico remains stable at 2.31%, with no change from the previous estimate. The nowcast estimate, updated with the most recent data, shows that the Mexican economy is holding steady for the moment. This stability comes at a time when global markets are feeling the pressure, especially with Wall Street showing signs of unease as investors brace for potential interest rate moves in the U.S. Notably, this economic backdrop is crucial for understanding the conditions under which Mexican growth is playing out.
Private consumption continues to be a bright spot in the economic landscape. With a growth rate of 2.85%, household spending is supporting overall activity, helping to buffer against external headwinds. This steady demand from consumers is vital, especially as the economy navigates a more cautious global trading environment.
Exports are showing a healthy growth rate of 5.21%, reflecting resilient external demand. This figure indicates that despite the broader concerns in the U.S. economy, Mexican goods are still finding their way to international markets. As traders keep an eye on U.S. economic indicators, these export figures signal a continued appetite for Mexican manufacturing, primarily from our biggest trading partner.
Imports are also on the rise, currently at 5.37%, indicating robust domestic demand. This uptick suggests that Mexican consumers and businesses are actively seeking foreign goods, which can be a double-edged sword. While it reflects a strong appetite for consumption and investment, it also raises concerns about the trade balance in the longer term, especially if external conditions shift.
Net trade dynamics remain challenging to assess without precise figures, but the growth in imports compared to exports may hint at pressure on the trade balance. As we look forward, the interplay between these external and internal demands will be key in shaping the economic narrative for Mexico. With the global economy on shaky ground, the balance between exports and imports will be under close scrutiny.
Real activity data tracks the economy's engine — output, spending, and trade — while nowcasts bridge the lag between releases. Real GDP captures total production; private consumption reflects household demand; exports and imports reveal external demand and the flow of inputs for Mexico's trade-exposed, manufacturing-heavy economy. Shifts in U.S. demand, global prices, and the peso often show up first in trade, then filter into GDP and consumption. Because official series arrive with delays and revisions, model-based nowcasts provide an early, probabilistic read for policy timing — useful if treated with uncertainty bands and cross-checked against higher-frequency signals.
Updated: 2026-01-16
Key Takeaways
The December 2025 ENOE survey shows unemployment at 3.28%, nudging up slightly from the previous month. The December 2025 ENOE survey shows unemployment at 3.28%, which is about the 33rd percentile historically. This marks a modest increase of 0.025 from November, continuing an upward trend observed over the last two months, with a total rise of 0.106. These developments come amid a rising tide of uncertainty in the U.S. economy, as highlighted by Wall Street's recent dips in response to concerns over inflation and potential rate adjustments from the Fed.
By gender, unemployment rates reveal a notable consistency, though slightly higher for women. Male and female unemployment rates are at 3.37% and 3.55%, respectively, both reflecting no change from the previous month. Despite this stability, the fact that women's unemployment remains marginally higher suggests a potential area of concern as the labor market navigates these uncertain waters.
Informal employment continues its downward trend, signaling a shift in the labor landscape. The share of informal workers stands at 27.8%, having fallen by 0.0258 from the previous month. This 6-month streak of decline, which totals a reduction of 0.295, could indicate a gradual formalization of the labor market, albeit amidst the broader economic challenges.
Unemployment spells are lengthening slightly, hinting at lingering difficulties for job seekers. The average duration of unemployment now sits at 1.87 months, showing an increase of 0.161 from the last quarter. This uptick, while not alarming, suggests that those out of work are finding it increasingly challenging to secure new positions, contributing to a sense of prolonged difficulty in the market.
Among the unemployed, educational attainment is shifting, reflecting a worrying trend. The educational mix of job seekers shows an increase in the proportion of those with no education, now at 3.51%. This rise, although modest, highlights potential vulnerabilities in the labor market, particularly as the job landscape evolves and requires more skilled workers.
Labor slack and its composition shape inflation pressure, policy timing, and social risk. Unemployment, underemployment, and unemployment by gender reveal how broad and uneven slack is; longer unemployment durations and weaker prospects for the more-educated raise scarring risks and damp wage growth. In Mexico's large informal sector, the informal employment share can swing sharply — often contracting faster in downturns as unprotected jobs are cut first, then rebounding early — masking true slack if headline unemployment alone is tracked. Tracking these dimensions helps distinguish cyclical slack from structural mismatches and calibrate monetary policy accordingly.
Updated: 2026-02-12 by Jorge Martínez
Key Takeaways
INEGI's Q4 2025 productivity release shows secondary sector output at 102, continuing its recent upward trend. The latest INEGI productivity data for Q4 2025, released in December, indicates that the secondary sector productivity index is at 102, reflecting a 3-month upward streak. This growth is largely driven by construction, which has soared to an impressive 106, while mining continues to lag behind at a mere 89.8. Notably, this growth seems to be more concentrated in construction rather than being broad-based across all industries, hinting that while some sectors are thriving, others are still digging themselves out of a hole.
Across the PCA indices, manufacturing composites show a concerning divergence in performance. The composite indices reveal a mixed bag: while productivity is at a modest 0.281, sales have been robust, rising to 0.61, suggesting that demand is still alive and kicking. However, labor demand is on a downward trajectory at -1.49, raising eyebrows about the sustainability of this growth. This divergence between sales and labor demand could signal future challenges—because let’s face it, if the demand is there but the workforce isn’t, we might just be throwing a party with no one to serve the drinks.
Within manufacturing, the top-performing subsectors shine a spotlight on food production, while transport equipment remains in the dumps. The top-performing subsectors include food, which is cruising at 111, a solid indicator of consumer demand, while transport equipment languishes at a dismal 82, reflecting ongoing struggles in that area. Given that food accounts for 18.86% of total manufacturing, its strong performance is undoubtedly propping up the overall figures. Meanwhile, the stark contrast with transport equipment underscores the uneven recovery within the manufacturing landscape—it's like a feast where some are dining lavishly while others are still waiting for their plates.
Productivity trends reveal the economy's capacity to grow without stoking inflation. In Mexico, productivity in the secondary sector — mining, energy, construction, and especially manufacturing — signals how efficiently output expands relative to inputs. Strong productivity gains mean firms can meet demand without raising prices, easing inflation pressure and supporting sustainable wage growth. Weak productivity, by contrast, constrains supply, making cost shocks more inflationary. Manufacturing deserves closer scrutiny, as its diverse subsectors respond differently to global demand, exchange rate shifts, and investment cycles. Tracking these patterns helps judge whether growth is supported by efficiency gains or reliant on credit and labor cost increases.
Updated: 2026-02-06 by Jorge Martínez
Key Takeaways
The January 2026 consumer confidence survey shows the general index at 1.15, reflecting a slight dip in sentiment as worries about rule of law and security continue to cast a long shadow. INEGI's latest January release reveals confidence at the 87th percentile, indicating that while consumers are generally optimistic, they are feeling the pinch as the index fell by 0.123 points from the previous month. The most striking divergence comes from the durables-specific index, which remains a robust 2.11 and suggests that consumers are still keen to splurge on big-ticket items, even as confidence in general stability wanes. This discrepancy hints at a complex consumer psyche that’s eager to buy but wary of the broader economic landscape.
Consumer confidence surveys gauge how secure households feel about their income and the economy. The general confidence index reflects overall sentiment, while sector-specific measures — such as willingness to purchase durables or housing — reveal spending appetite in categories most sensitive to interest rates. Stronger confidence supports consumption and can add inflationary pressure; weaker confidence signals caution and potential slack. For monetary policy, these indicators help anticipate whether rate moves are restraining or stimulating household demand.
COMING SOON...
Updated: 2026-02-04 by Pablo Rivas
Key Takeaways
The January 2026 SPF survey shows the aggregate Concern Index at 2.83, reflecting a dip from last month. The January 2026 SPF survey shows the aggregate Concern Index at 2.83, placing it around the 64th percentile. This index is falling, down by 0.06 from December. It's worth noting, though, that over the past year, concerns have crept up by 0.55, indicating a growing unease among economists despite this recent dip.
Economists have identified public insecurity as the leading constraint on growth, with a notable uptick in concerns over U.S. The key constraints currently cited include public insecurity at 10.1%, U.S. trade policy at 8.4%, and a lack of structural change at 4.2%. The single biggest mover this month is public insecurity, which saw a rise of 1.53 percentage points. This growing concern reflects broader anxieties about safety and stability, which could weigh heavily on economic confidence.
The perceived probability of recession stands at 25.0%, marking a moderate level of concern relative to historical norms. Recession concerns among surveyed economists are currently moderate, reflecting a 25.0% probability compared to the previous quarter. This signals a bit of unease, especially given the elevated standing relative to historical averages. Looking ahead, the probability eases to 15.0% for the next quarter, suggesting some confidence that the economy might stabilize in the near term.
According to forecasters, the peso is viewed as overvalued, indicating a persistent misalignment in expectations. FX expectations suggest the peso is overvalued, with a current-month misalignment of +0.205. This perception has been consistent across the forecast horizon, indicating a sustained belief that the peso is weaker than anticipated. Such misalignment might prompt policymakers to reconsider interventions to stabilize the currency.
Banxico's Survey of Professional Forecasters (Encuesta sobre las Expectativas de los Especialistas en Economía del Sector Privado) polls economists from major financial institutions, consultancies, and research centers. Published monthly, it captures expert views on growth constraints, inflation expectations, and recession risks before official data confirm trends. Because these respondents shape market narratives and influence investment decisions, the survey offers an early window into shifting professional sentiment — making it a valuable leading indicator for policymakers and market participants alike.
Updated: 2026-02-18 by María López
Key Takeaways
Mexican equity markets as of February 18, 2026, show excess returns at 0.0408, reflecting a complex interplay of market forces. With data through February 18, 2026, realized volatility stands at 0.0088, indicating a cautious yet upward trajectory. Notably, illiquidity has surged, now pegged at 137.45, signaling heightened market tensions. The recent uptick in excess returns, particularly against the backdrop of fluctuating economic policies and external pressures, underscores the precarious nature of investor sentiment in these times.
The decomposition shows that recent volatility has been predominantly driven by US policy shocks and prevailing economic uncertainty. These factors have emerged as persistent contributors, with liquidity and financing challenges compounding the volatility landscape. The market’s response to these drivers highlights a significant shift in investor behavior and expectations, setting the stage for potential shifts in capital flows and risk management strategies.
Investor sentiment remains fragile as policy uncertainty climbs, with AAII and NAAIM indicators reflecting a cautious outlook. This atmosphere of trepidation is echoed in elevated Economic Policy Uncertainty (EPU) levels, which further complicate the decision-making landscape for fund managers and corporate strategists alike. The confluence of these sentiment indicators suggests that while markets may be adjusting, the path forward will be fraught with challenges that require astute navigation.
Volatility Measures
| Measure | Jan 2026 | Feb 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | 0.2107 | 0.4393 | +0.2286 | US Policy Shocks (+0.145) |
| Realized Volatility | 0.0093 | 0.0108 | +0.0015 | Const (+0.010) |
| Illiquidity (Amihud) | 105.3916 | 116.2428 | +10.8512 | Const (+142.308) |
Monthly averages. Top Driver = largest OLS category contribution to latest value.
Financial market returns, volatility, and liquidity signal investor sentiment and risk appetite. Excess returns over government bonds capture the risk premium investors demand for holding equities; wider spreads suggest higher perceived risk or stronger growth prospects. Realized volatility in a stock market index reflects uncertainty — sharp swings indicate fragile sentiment and raise the cost of capital. Illiquidity shows how trading volume and price impact interact: when liquidity dries up, small trades can move prices disproportionately, amplifying shocks. For monetary policy, these indicators matter because they shape funding costs, investment flows, and the broader transmission of rate decisions into financial conditions.
Volatility drivers are analyzed in two steps. First, Principal Component Analysis (PCA) groups the six SPF concern categories and investor sentiment indicators (AAII bull-bear spread, NAAIM exposure index) into thematic driver clusters that capture common variation. Second, an OLS regression decomposes recent volatility movements into contributions from each driver cluster, quantifying how much of the observed excess return and realized volatility is attributable to policy uncertainty, external sentiment, and domestic macro conditions. The decomposition is descriptive — it identifies contemporaneous associations, not causal effects.
Updated: 2026-02-18 by María López
Key Takeaways
Banxico's February 2026 credit release reveals tightening conditions in money markets, with rate premia signaling a notable shift. Following the latest February lending data, rate premia have narrowed significantly, with money market spreads now at 0.196—down from the previous month. This tightening trend, marked by a -0.0595 decline, indicates a shift towards more favorable funding conditions. Such developments could potentially ease the cost of borrowing and invigorate lending activity, crucial for sustaining economic momentum.
Household mortgage rates are reflecting the evolving economic landscape, with the total annual cost (CAT) averaging 14.0%. The current CAT range, spanning from 11.1% to 28.2%, suggests a complex pass-through from policy rates, highlighting affordability challenges for many borrowers. As rates moderate, this could offer some respite to households navigating the financial landscape, yet the burden remains significant for those on the higher end of the spectrum.
Debt issuance patterns show a robust reliance on fixed-rate financing, signaling firms' preferences amid a changing interest rate environment. The current composition reveals fixed-rate debt accounting for 19.79% of GDP, alongside a notable share of variable inflation-linked debt at 10.28%. This shift towards fixed-rate instruments underscores companies' strategic moves to hedge against interest rate volatility, ensuring stability in their financing amidst uncertain economic waters.
Rate premia show how market and bank funding costs move relative to the policy rate, indicating the efficiency of monetary transmission. Household mortgage rates capture the cost of long-term borrowing — their sharp rise in recent years signals affordability pressures and distributional effects, as many families face double-digit costs. Debt issuance patterns, normalized by GDP, reveal how firms finance themselves; the balance between fixed and variable rates matters for vulnerability to policy shifts. Together, these indicators show how policy rates filter into real borrowing conditions, affecting credit demand, investment, and ultimately growth and inflation dynamics.
