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In July, Mexico’s seasonally adjusted consumer confidence index increased to 45.9, up from 45.4 in the previous month. The data presented involves various risks and uncertainties related to market activities.
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Given today’s date of August 4, 2025, the recent rise in Mexico’s consumer confidence to 45.9 for July is a notable signal for the coming weeks. This small but positive shift suggests growing optimism that could translate into increased domestic spending. We view this as a potential green shoot for the Mexican economy heading into the third quarter.
This sentiment is further supported by other recent data, as Mexico’s national statistics agency, INEGI, just reported that June 2025 retail sales grew 3.2% year-over-year. Additionally, with Banxico holding interest rates steady in its last meeting, fears of aggressive monetary tightening have subsided for now. This creates a more stable environment for both consumers and businesses.
For us, this points to potential strength in the Mexican Peso against the U.S. dollar. The USD/MXN exchange rate has been hovering near the 17.80 mark, down from over 18.50 earlier in the second quarter of 2025. Derivative traders might consider strategies that benefit from a stronger peso, such as buying put options on the USD/MXN pair.
We also see opportunities in Mexican equities, particularly through derivatives on broad market ETFs like the iShares MSCI Mexico ETF (EWW). The sustained momentum from the nearshoring trend continues to attract investment into Mexico’s industrial sector. A confident consumer adds a layer of domestic demand that could help fuel a broader market rally.
Looking back, this setup has echoes of what we observed in early 2023. Back then, a similar uptick in consumer confidence preceded a multi-month, 7% rally in the S&P/BMV IPC index. While past performance is not a guarantee, this historical pattern reinforces the idea that the current positive sentiment should be watched closely.
