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Investing.com -- Citi provided a comprehensive outlook on Mexico’s economic and financial prospects for the upcoming years.
The financial services company expects a modest 0.2% GDP growth for Mexico in 2025. In terms of monetary policy, Citi forecasts that the Bank of Mexico (Banxico) will maintain its year-end (YE) interest rate at 8% in 2025.
Citi’s FX and Rates Strategy indicates a shift in the narrative surrounding tariffs, moving focus from the United States-Mexico-Canada Agreement (USMCA) to broader global US trade deals. This shift is seen as supportive of the Mexican Peso (MXN). Citi maintains an overweight (OW) position in Mexican government bonds (Mbonos) within its Emerging Market (EM) Bond Portfolio, signaling continued value in Mexico’s rates.
In the realm of credit strategy, Citi remains neutral on Mexican credit. However, when it comes to equity strategy, Citi has maintained its end-of-year 2025 target for the S&P/BMV IPC, a benchmark stock market index of the Mexican Stock Exchange, at 58,500 points.
Furthermore, Citi introduced a mid-year 2026 target for the S&P IPC at 62,000 points. The firm suggests that stock picking is likely to become more prominent than index investing, referencing their May Most Valuable Picks (MVPs).
Citi’s Quantitative Research places Mexico in the Contrarian quadrant, indicating a divergence from the consensus view. Within this framework, Banorte, a leading Mexican banking and financial services holding company, is highlighted as the highest-ranked stock based on a combination of value and momentum scores.
This suggests that, according to Citi’s metrics, Banorte presents a compelling opportunity for investors considering individual stocks over broader market indices.
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