Banco de México Implements New Cut in Interest Rates
The Board of Governors of the Bank of Mexico (Banxico) applied a new 25 basis point cut to the interest rate, bringing it down to 7% in the latest monetary policy announcement for 2025. This move was well anticipated by the market, according to a Citi survey.
The decision on monetary policy was made by a majority of 4 to 1, with Subgobernador Jonathan Heath again being the sole dissenter.
Manufacturing Production Rebounds in October
In the tenth month of the year, Mexico’s manufacturing industry production volume increased by 0.3% compared to September, continuing a two-month modest recovery despite wage bills remaining low. This information was reported by the National Geography and Statistics Institute (Inegi) on Wednesday.
With its slight monthly expansion, the physical volume index of the manufacturing industry grew by 0.7% year-on-year, returning to positive territory after three unfavorable comparative months, according to the Monthly Survey of the Manufacturing Industry (EMIM).
The monthly upturns in September and October did not prevent manufacturing physical production from remaining negative year-to-date, showing a 0.4% decline—the first setback for the indicator since pandemic-ridden 2020.
The local currency showed minimal movement against the dollar at the end of a week marked by monetary policy decisions from various banks, including Banco de México (Banxico).
The exchange rate ended the day at 17.9994 units per dollar, a marginal gain of 0.02% for the currency, which was less than a cent compared to the previous day’s close of 18.0032 units per dollar, according to official Banxico data.
With today’s close, the peso slightly extended its weekly gains. Against last Friday’s official close of 18.0354 pesos, the change represented an accumulation of 3.60 centavos or 0.20%, according to official Banxico data.
BMV and Biva
- Mexican Stock Exchanges
Mexico’s stock exchanges concluded the day with a moderate gain in trading. Local indices rose for the second consecutive day after breaking a negative streak, but it wasn’t enough to reverse weekly losses.
The leading S&P/BMV IPC index, compiled by the Mexican Securities Exchange (BMV), which groups the most traded local stocks, gained 0.25% to 63,966.98 points, while the FTSE BIVA, from the Institutional Securities Exchange (Biva), advanced 0.19% to 1,266.18 points.
The cumulative movement reached the S&P/BMV IPC, causing a 1.15% weekly decline. It has gained 28.95% year-to-date.
Wall Street
- Major Indices on Wall Street
The leading indices on Wall Street rose on Friday, with technology values recovering from earlier week’s drop while Nike fell due to weak sales in China, which hurt its quarterly results.
The Dow Jones Industrial Average, composed of the shares of 30 major companies, increased by 0.38% to 48,134.89 units, while the S&P 500, comprising the most valuable companies, gained 0.82% to 6,830.04 points. The Nasdaq Composite, a technology-focused index, advanced 1.31% to 23,307.62.
With this rebound, Wall Street concluded its last full week of the year. The Dow Jones declined by 1.19% over the period and gained 12.83% for the year; the S&P 500 dropped by 0.76% but advanced 15.77% annually; meanwhile, the Nasdaq fell by 0.77% and accumulated 20.12% for the year.
Key Questions and Answers
- What was the recent decision by Banxico regarding interest rates? Banxico cut its benchmark interest rate by 25 basis points to 7%.
- How did Mexico’s manufacturing production perform in October? It increased by 0.3% compared to September, marking a modest recovery despite low wage bills.
- What was the movement of the Mexican peso against the US dollar this week? The peso showed minimal movement, gaining marginally by 0.02%.
- How did Mexican stock exchanges perform this week? They had a moderate gain, but weekly losses persisted.
- What were the performances of major indices on Wall Street last week? The Dow Jones, S&P 500, and Nasdaq Composite all ended the week with gains, despite Nike’s poor quarterly results due to weak sales in China.
