Mexico’s retail sales rose by 1% month on month in January. This followed a -0.1% reading in the previous month.
The strong jump in January’s retail sales confirms the Mexican consumer remains surprisingly resilient. This data suggests underlying strength in the domestic economy, which fuels inflation. For us, this makes it very unlikely that Banxico, Mexico’s central bank, will be in any hurry to cut interest rates.
This view is supported by the latest inflation figures for February, which showed headline inflation remaining sticky at 4.5%, above the central bank’s target. Given Banxico just held its key interest rate at 11.00% earlier this month, we expect this high-rate environment to continue. This scenario is a direct result of the persistent consumer demand we are now seeing confirmed.
Therefore, we believe the Mexican Peso is positioned for further strength in the coming weeks. The high interest rate differential that benefited the “super peso” trend throughout 2025 is clearly not going away. With the USD/MXN pair currently hovering near 17.10, traders could use options to bet on a break below the psychological 17.00 level.
This consumer strength also creates opportunities in Mexican equities. A robust domestic market is good for local companies, particularly in the consumer and industrial sectors, a fact backed by the latest manufacturing PMI which showed continued expansion at 53.1. We see value in buying call options on the IPC stock index to capture this potential upside.
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