Mexico Multi-Asset: Lack of ST catalyst, eyes on USMCA updates

Research evidence excerpt

Mexico Multi-Asset: Lack of ST catalyst, eyes on USMCA updates

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29 Jun 2026 13:15:10 ET │ 29 pages

Mexico Multi-Asset

Lack of ST catalyst, eyes on USMCA updates

CITI'S TAKE

Equity startegy

Economics. USMCA talks have missed the July 1 deadline and may extend

into 2027, suppressing investment. Credit Strategy. We maintain our Andrés Cardona AC

Underweight recommendation on Mexico sovereign debt. Fx and Rates +57-601-484-0441

Strategy. Mexican rates risk premium normalized, FOMC weighed on MXN andres.cardona@citi.com

and regional carry peers, albeit from strong levels. Equity Strategy. We

reiterate our 2026YE S&P IPC TP at 70,000 points, while introducing our Matheus Tostes

mid-2027 target at 73,000. We tend to think the S&P IPC is likely to trade +55-21-4009-0406

range bound in 2H26. matheus.tostes@citi.com

Economics

Economics — Mexico's 2Q26 recovery is fragile — GDP forecast at 1.1% — with weak

consumption and employment despite a rebound in industrial production. USMCA Julio Cesar Ruiz

talks have missed the July 1 deadline and may extend into 2027, suppressing +52-55-8421-6833

investment. Inflation is contained, Banxico holds at 6.50%, and the fiscal deficit is julio.ruiz@citi.com

projected at 4.4% of GDP. President Sheinbaum faces mounting political pressure

ahead of 2027 midterms amid security concerns and institutional uncertainty. Felipe Juncal

Credit Strategy — Mexico Credit is facing a slippery slope. We maintain our felipe.juncal@citi.com

Underweight recommendation on Mexico sovereign debt. While Mexico continues

to benefit from a large and diversified economy, deep local capital markets, and Fx and Rates Strategy

investment-grade status across all major rating agencies, we believe the risk-reward