Mexican Peso Ends Flat Against the Dollar After Local Investment Data

Posted on December 3, 2025 by Ignacio Teson

Market participants in the foreign-exchange space continue to assess the likelihood of further interest-rate cuts by the U.S. Federal Reserve.

The Mexican peso ended Wednesday’s session flat against the U.S. dollar. The local currency closed virtually unchanged as traders digested the latest economic data from Mexico and U.S. employment figures.

The exchange rate finished the day at 18.2838 pesos per dollar, compared with 18.2826 in the previous session, according to official figures from the Bank of Mexico (Banxico). This represented a marginal depreciation of 0.01%, or less than one centavo.

[[USD/MXN-graph]]

The dollar traded within a range between 18.2847 at the high and 18.2473 at the low. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell 0.44% to 98.90.

“The exchange rate continues to trade without major swings; today’s range has been between 18.24 and 18.29 pesos. The highest trading volumes so far this month have appeared around 18.31 and 18.27,” analysts noted.

Session Catalysts

Corporate investment in Mexico fell 0.3% in September compared with August, according to data from Inegi. Gross fixed investment dropped 6.7% year over year in September. In addition, the Mexican government announced a 13% increase in the minimum wage for next year.

Earlier in the session, the peso had strengthened as the dollar retreated alongside Treasury yields, following data showing that U.S. private payrolls posted their sharpest monthly decline since early 2023.

The exchange rate is approaching the year-to-date low of 18.2008 pesos per dollar, recorded on September 17. This suggests that the market might seize the opportunity to take on FX hedges or engage in early dollar buying.

Traders were also absorbing the increasing possibility that U.S. President Donald Trump may choose Kevin Hassett as the next chair of the Federal Reserve — a candidate seen as likely to support additional rate cuts.

Fed Outlook

Markets currently assign an 88.8% probability that the Federal Reserve will cut its policy rate by 25 basis points next week, which would mark the third consecutive reduction of that size. The rate outlook for next year remains more uncertain.

Volatility could rise later in the week as investors await Friday’s release of the September PCE Price Index, the Fed’s preferred inflation gauge.

Wall Street Rises as Weak Jobs Data Strengthens Rate-Cut Bets

Posted on December 3, 2025 by Ignacio Teson

In this context, the Dow Jones rose 0.86% to 47,883.14 points; the S&P 500 gained 0.35% to 6,853.46; and the Nasdaq Composite advanced 0.17% to 23,454.09.

Nasdaq is up this week as tech stocks perform very well. — Nasdaq is up this week but tech stocks did not perform very well.

Wall Street closed higher on Wednesday, supported by weak U.S. private-sector employment data that strengthened expectations of a rate cut in December. Monetary optimism managed to offset weakness in Microsoft, which came under pressure amid renewed doubts about demand linked to artificial intelligence (AI).

In this context, the Dow Jones advanced 0.86% to 47,883.14 points; the S&P 500 climbed 0.35% to 6,853.46; and the Nasdaq Composite gained 0.17% to 23,454.09.

[[SPX-graph]]

Weak Private-Sector Jobs Data Reinforces Rate-Cut Expectations

U.S. private payrolls fell by 32,000 positions in November, surprising markets that expected a gain of 5,000, according to the ADP National Employment Report. In October, the reading had been revised up to show 47,000 new jobs.

“Hiring has been choppy lately as employers face cautious consumers and an uncertain macroeconomic environment. And while November’s slowdown was broad-based, it was driven by a pullback among small businesses,” said Nela Richardson, ADP’s chief economist.

The report added to signs of a cooling labor market, increasing the likelihood that the Federal Reserve will deliver a 25-basis-point cut at its December 9–10 meeting. According to CME FedWatch, the probability of a cut climbed to nearly 90%.

On Friday, markets will closely watch the release of the Personal Consumption Expenditures (PCE) Price Index — the Fed’s preferred inflation gauge — along with personal income and spending data, which are key to assessing the rate outlook.

Kevin Hassett: A Nominee Under Pressure

The Financial Times reported that major Wall Street firms have communicated to the U.S. Treasury their concern that Kevin Hassett — who is being considered to lead the Federal Reserve — might push for aggressive rate cuts to align with President Donald Trump’s preferences.

The Treasury has held private meetings with large market participants to evaluate candidates. Some attendees specifically warned that Hassett could adopt an “overly expansionary” stance if appointed.

Microsoft Weighs on Tech and Drags AI-Linked Stocks

Microsoft shares fell 2.5%, even after the company denied a report by The Information claiming it had lowered internal AI-related sales targets. According to the report, several business units reduced their goals for AI agent products after sales teams failed to meet targets in the fiscal year that ended in June.

The noise spilled into the broader tech sector: NVIDIA slipped 1% and Broadcom dipped 0.2%.
Tesla shares rebounded 4% on reports from the Trump administration suggesting accelerated development in the robotics industry — a key growth area for Elon Musk’s company.
In contrast, Netflix slid 5% a day after Reuters reported that the company submitted a bid for Warner Bros. Discovery, raising investor concerns about its expansion strategy.

Bitcoin’s Drop Wipes Out $1 Billion in Leveraged Positions

Posted on December 3, 2025 by Ignacio Teson

Selling pressure accelerated a decline that has dragged down Bitcoin and the broader crypto market since early October.

The Bitcoin and cryptocurrency market stumbled again at the start of the global trading week, deepening a correction that has stretched over several sessions and wiped out nearly $1 billion in leveraged positions in just a single day.

Selling pressure intensified a drop that has weighed on Bitcoin and other digital assets since early October, when more than $19 billion in forced margin-related sales kicked off the downturn.

[[BTC/USD-graph]]

Bitcoin fell as much as 8%, touching $83,824 in New York before recovering to current levels. With this move, the cumulative decline from early October’s highs neared 30%. Ether, the second-largest cryptocurrency, performed even worse: it slid up to 10%, to $2,719, leaving it down 36% in seven weeks.

Bitcoin’s slump spills over to the rest of the crypto market

The impact was even more severe among small-cap, low-liquidity tokens—favorites of traders seeking sharp upside swings. A MarketVector index tracking the lower half of the top 100 digital assets has plunged nearly 70% so far this year.

Market dynamics remain dominated by so-called “liquidation cascades,” which occur when prices fall through thresholds that trigger the automatic closing of leveraged positions.
The October 10 episode—just days after Bitcoin hit $126,251—still reverberates in an ecosystem where visibility into true leverage levels is limited, as exchanges do not fully disclose data.

The downturn also coincides with a more fragile global environment. U.S. equities started the week lower, the yen strengthened, and the Bank of Japan signaled a possible imminent rate hike. Against this backdrop, attention is shifting to the Federal Reserve’s policy path and the signals that could shape expectations for 2026.

A challenging backdrop

Adding to the tension is the situation at Strategy, Michael Saylor’s company, which set aside $1.4 billion to cover dividend and interest payments in an effort to ease concerns about potential Bitcoin sales from its massive holdings. Its shares fell more than 10% on Monday and are now down roughly 66% from their 2024 peak.

Meanwhile, U.S. spot Bitcoin ETFs drew only $70 million in inflows over the past week, following about $4.6 billion in outflows the previous month—reflecting still-weak investor appetite.

Even so, some traders believe there may be room for a year-end rebound, provided macroeconomic data ease pressure on interest-rate expectations.

Bank of Japan to Decide on Rate Hike in Two Weeks

Posted on December 3, 2025 by Ignacio Teson

That decision, combined with the Federal Reserve’s imminent rate cut, would tighten global liquidity, dampen appetite for risk assets and emerging markets, and potentially affect Argentina.

One week after the Federal Reserve decides whether it will finally cut rates in the U.S., another key monetary authority—the Bank of Japan (BoJ)—will have to determine whether to move in the opposite direction. It’s a decision that could trigger global turbulence, as it would directly impact one of the most important sources of leverage in recent decades: the yen carry trade.

On Monday, global markets were shaken by comments from BoJ Governor Kazuo Ueda, who said the central bank “will consider the pros and cons of raising the policy rate and make appropriate decisions,” taking into account the economy, inflation, and financial markets both at home and abroad.

[[USD/JPY-graph]]

Rate futures currently price in nearly a 90% probability that the Fed will cut again, while assigning a 65% chance that Japan will raise rates once more.

Japan’s Unique Situation

After more than two decades of near-zero rates, negative rates, and yield curve control, the Bank of Japan has entered a normalization phase that markets are now starting to take seriously—one with direct implications for one of the most iconic trades of the past decades: the yen-funded carry trade.

For years, this environment allowed global investors to borrow in yen at virtually no cost and deploy those funds into higher-yielding assets around the world.

Last year, the BoJ initiated a historic shift, gradually raising its policy rate from –0.1% to 0.5%—the highest level in more than a decade. At the same time, the Fed moved in the opposite direction, starting a cutting cycle from its peak of 5.5% to 4% today.

With inflation in Japan hovering around 2–2.5% and wages showing slightly stronger momentum, expectations for further rate hikes have intensified. In line with this, two-year Japanese government bond yields recently rose above 1% for the first time since 2008.

Wall Street Ends Higher; Boeing Shares Jump 10%

Posted on December 2, 2025 by Ignacio Teson

The averages rose in a market growing more optimistic toward year-end on expectations that the Fed may cut rates again next week.

Wall Street’s three main indexes closed moderately higher on Tuesday. Stocks advanced as investors grew more optimistic heading into the final stretch of the year, encouraged by the likelihood of another Federal Reserve rate cut next week.

The Dow Jones Industrial Average, made up of 30 blue-chip companies, climbed 0.39% to 47,474.46. The S&P 500 rose 0.25% to 6,829.37, while the tech-heavy Nasdaq Composite gained 0.59% to 23,413.67.

Information technology was among the strongest performers, driven by gains in giants such as Apple (+1.09%), which hit a new record valuation of $4.22 trillion on the back of strong iPhone 17 sales.

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Fed expected to cut rates

Following recent economic data and comments from Fed officials, the market is pricing in a 25-basis-point cut next week. According to CME’s FedWatch tool, the probability of such a move stands above 89%.

The U.S. economic backdrop favors a cut, as additional stimulus is increasingly seen as necessary to revive household consumption and support risk appetite.

Key catalysts ahead

Investors are now awaiting U.S. employment and inflation data due this week. Standing out is the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, which could provide further clarity.

Six of the S&P 500’s 11 major sectors ended lower. Energy (-1.21%) led declines by a wide margin, while industrials (+1.13%) and technology (+0.97%) topped the gainers. Within the Dow, Boeing (+10.05%) was the standout.

Notable movers

Boeing surged after CFO Jay Malave said at a UBS conference that the company’s recovery is “well underway” and that it expects to increase deliveries of its 737 and 787 aircraft in 2026 compared with 2025.

Among individual names, Warner Bros. Discovery (+2.8%) also gained after reporting it had received a second round of acquisition offers — including one from Netflix (+0.20%) — following its request for improved bids from all suitors.

Mexican Peso Rises Ahead of U.S. Jobs and Inflation Reports

Posted on December 2, 2025 by Ignacio Teson

The peso strengthened in a market still betting on a Federal Reserve rate cut next week, while awaiting key indicators.

The Mexican peso posted a slight gain against the dollar in the second trading session of the week. The local currency advanced as investors continued to price in a rate cut by the Federal Reserve (Fed) next week and awaited key data releases.

The exchange rate closed the day at 18.2826 pesos per dollar, compared with 18.3103 yesterday, according to official data from the Bank of Mexico (Banxico). The move represented an appreciation of 2.77 centavos, or 0.15%.

[[USD/MXN-graph]]

The dollar traded between a high of 18.3285 and a low of 18.2788 pesos. The Dollar Index (DXY)—which tracks the greenback against six major currencies—fell 0.04% to 99.37.

Key catalysts

Markets are awaiting U.S. inflation and labor market data this week, which will be crucial for assessing the strength of the world’s largest economy. These indicators will also be key references for the Fed’s final policy decision of the year, scheduled for December 10.

According to the CME FedWatch tool, which tracks federal funds futures, traders assign an 89.2% probability to a 25 bps rate cut—what would be the third consecutive reduction. However, the outlook for January remains uncertain.

Growth warnings

The market also digested a warning from the OECD, which said global growth should hold up in 2025 thanks to the rise of artificial intelligence, but a complicated trade environment could make 2026 more challenging.

For Mexico, the organization forecasts 0.7% growth in 2025, slightly above the 0.5% projection from private-sector analysts surveyed by Banxico. The OECD also expects growth of 1.2% in 2026 and 1.7% in 2027, according to its latest outlook report.

In the coming days, the exchange rate is expected to trade between 18.22 and 18.33, with a slight appreciation bias if the global dollar remains stable and speculative positioning continues to favor the peso.

Bessent Cancels Argentina Trip, Milei–Trump Honeymoon Ends

Posted on December 2, 2025 by Ignacio Teson

The cancellation of the U.S. Treasury Secretary’s trip comes at a time when the official is facing internal criticism over the financial support extended to Argentina’s libertarian government.

In a development that deepens questions about the strategic relationship between Washington and Buenos Aires, U.S. Treasury Secretary Scott Bessent has decided to cancel his planned trip to Argentina for the first week of December.

The decision comes just days after President Javier Milei suspended his own visit to the United States, originally scheduled for December 5 in Washington, where he had planned to attend the 2026 World Cup draw as a guest of Donald Trump.

The dual setback raises doubts about the degree of dependence Argentina’s government has built in recent months. With roughly $5 billion in debt payments coming due in January 2026 and the country’s urgent need for external financing to shore up reserves, the move sends an implicit warning about the limits of continued U.S. support.

Bessent’s trip—initially touted by the Milei administration as a milestone for deepening dialogue on macroeconomic stability and a potential $20 billion currency swap—was canceled amid growing signs of frustration inside the White House. Sources close to Trump adviser Barry Bennett leaked complaints about Argentina’s “excessive closeness” to China, with imports from Beijing surpassing $13.09 billion in the first nine months of 2025, a 66% year-over-year jump. That trend runs counter to the “America First” doctrine, which demands exclusive geopolitical alignment in the Western Hemisphere.

A pause in the relationship

In parallel, the mutual cancellations may hint at early cracks in the Trump–Milei relationship, which began as an ideological honeymoon marked by warm meetings at Mar-a-Lago and public praise on social media. Bessent was the architect of measures like the partial activation of the currency swap in October, which he described as a “profitable credit line” to stabilize the Argentine peso.

However, the refusal by U.S. private banks to extend an additional $20 billion rescue package to Argentina due to lack of collateral combined with the canceled trips and delays in finalizing a U.S.–Argentina free trade agreement, suggests a subtle but notable shift in Washington’s risk calculus. Meanwhile, and for unrelated reasons, Trump himself has publicly threatened to “kick his own secretary in the ass” over alleged mistakes involving the Federal Reserve.

MicroStrategy Admits It Will Sell Bitcoin if Liquidity Is Needed

Posted on December 2, 2025 by Ignacio Teson

The company is setting aside a $1.44 billion reserve, arguing that it will help ensure market volatility does not affect investor dividends.

The cryptocurrency market is closely watching Strategy after the company announced the creation of a $1.44 billion reserve, funded by the sale of Class A shares, to finance dividend and interest payments. The move caused the largest institutional holder of Bitcoin (BTC) to lose more than 10% on Monday.

The company stated that its goal is to maintain a reserve sufficient to cover “at least twelve months” of dividend payments and, eventually, to increase that coverage to 24 months “or more.” It also acknowledged that the size of the reserve will be adjusted “based on market conditions, liquidity needs, and other factors.”

[[BTC/USD-graph]]

Michael Saylor, Strategy’s founder and executive chairman, said: “Establishing a dollar reserve to complement our BTC reserve marks the next step in our evolution, and we believe it will better position us to navigate short-term market volatility while continuing to pursue our vision of becoming the world’s leading issuer of digital credit.”

“And we want to reassure you that Bitcoin’s volatility will never impact your dividends. To achieve that, we’ve added a U.S. dollar reserve,” Saylor added.

He also clarified: “There are skeptics and cynics who have long believed that we wouldn’t—or couldn’t—or lacked the willingness to sell Bitcoin to finance dividends, and that sometimes turns into a bearish thesis. I think it’s important to dispel that notion. Not only can the company sell Bitcoin to pay dividends, it can sell highly appreciated Bitcoin, pay the dividends, and then continue increasing its Bitcoin holdings every quarter, indefinitely.”

Possible paths for Strategy depending on Bitcoin’s movement

On Tuesday, December 2, Bitcoin climbed above $90,000, offering a respite after several weeks of downward pressure. However, Strategy estimates that if Bitcoin ends the year between $85,000 and $110,000, the company’s results for this fiscal year could range from a $5.5 billion net loss to a $6.3 billion net profit.

The company financed its Bitcoin purchases using a combination of debt and equity products, many of which offered high dividend payouts. But Bitcoin’s slump after hitting its all-time high in October has put pressure on the tech firm, which now also faces competition from alternative investment companies.

Moreover, because Strategy is included in major indices such as the Nasdaq 100, MSCI USA, and MSCI World, its exposure to Bitcoin flows into both retail and institutional portfolios through passive investment vehicles.

Given this backdrop, the market fears the company may sell part of its Bitcoin holdings. On Monday, the firm announced that it had reached 650,000 BTC after acquiring 130 additional tokens at an average price of $89,860 during the second half of November. This position is valued at roughly $56 billion and represents more than 3% of the total Bitcoin supply.

Wall Street Stumbles Ahead of a Crucial Rates Week

Posted on December 1, 2025 by Ignacio Teson

Although a December rate cut is widely expected, the real uncertainty lies in what comes next. Against that backdrop, all three major benchmarks closed lower on Monday.

Nasdaq leads declining stock indices today.

Wall Street’s main indexes fell on Monday, December 1, after a cautious trading session that opened the final month of the year—just days before the Federal Reserve is expected to deliver another interest-rate cut.

The Dow Jones Industrial Average dropped 0.9% to 47,289.36 points. The S&P 500 slipped 0.4% to 6,820.71, while the Nasdaq Composite also fell 0.4% to 23,275.92.

Last week—shortened by the Thanksgiving holiday—all three benchmarks gained more than 3%. The S&P 500 and the Dow also closed November in positive territory, while the Nasdaq ended the month down 1.5%, reflecting renewed concerns over stretched tech valuations and the rapid pace of AI-related spending.

[[SPX-graph]]

Fed rate-cut decision approaches

Investor sentiment remains broadly positive, supported by rising expectations of a quarter-point rate cut at the Fed’s December 9–10 meeting.

The probability of a cut has surged to around 88%, up from roughly 45% just over a week ago. Dovish signals from Fed officials—hinting that economic conditions may warrant a reduction—have helped fuel those expectations, though uncertainty lingers due to the limited flow of new data following the recent federal government shutdown.

This week will bring a wave of U.S. economic releases, including manufacturing and services activity, consumer confidence, and private payrolls. Major retail names will also be in focus after last week’s Black Friday data showed a rise in online spending.

Fed chair succession in the spotlight

Markets are also weighing comments from President Donald Trump, who said he has already decided whom he will nominate as the next chair of the Federal Reserve, though he declined to disclose a name.

Recent reports suggest the shortlist includes White House economic adviser Kevin Hassett, former Fed governor Kevin Warsh, and current Fed governor Christopher Waller. Hassett is reportedly the leading contender, though he downplayed speculation, saying only that he would be “delighted to serve.”

Stocks to watch

Strategy Inc. tumbled 3.2% after cutting guidance and selling shares to build a $1.44 billion cash buffer—an attempt to ease concerns that the Bitcoin treasury manager may be forced to sell part of its massive crypto holdings, valued at $56 billion.
Shares of Ascent Industries Co. jumped 6.7% after the company announced it had secured a new commercial program expected to generate more than $10 million in incremental annualized revenue.

Mexican Peso Slips After Nearly Hitting a Yearly High

Posted on December 1, 2025 by Ignacio Teson

The peso pulled back after briefly touching 18.25 per dollar—its strongest level in two weeks—as traders assessed key economic data in both Mexico and the United States.

The Mexican peso edged lower against the dollar in the first session of December. The local currency retreated after earlier hitting a two-week high, with traders digesting important indicators on both sides of the border.

The exchange rate closed the day at 18.3103 pesos per dollar. Compared with Friday’s official Banxico print of 18.2953, the move reflects a loss of 1.5 centavos, or 0.08%. During the session, the dollar traded between a high of 18.3491 and a low of 18.2527. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, slipped 0.04% to 99.42 points.

[[USD/MXN-graph]]

The key support level now sits at 18.20—the year-to-date low. The Fed’s December 10 policy decision will be crucial for price action, as the central bank’s guidance is likely to drive positioning. With the exchange rate approaching the annual low of 18.2008 (set on September 17), the market may look to hedge currency exposure; early dollar buying could trigger a short-term rebound.

Markets await Powell

Data released Monday showed U.S. manufacturing contracted for a ninth consecutive month in November. The weak figures weighed on the dollar, allowing the peso to strengthen to a two-week low before later reversing.

According to CME’s FedWatch tool, futures markets assign an 85.4% probability to a 25-basis-point rate cut this month. Fed Chair Jerome Powell is set to speak at a public event tonight.

Soft signals in Mexico

While traders weigh the likelihood of a U.S. rate cut, Mexico is digesting weaker remittance data—one of the country’s main sources of foreign currency—which fell for a seventh consecutive month in October, according to Banxico.

The central bank also released its latest survey of private-sector economists. Forecasters reduced their growth outlook for Mexico in 2025 to 0.40% from 0.50%, and trimmed their inflation forecast to 3.74% from 3.78%.