BlackPaper, the week
The ceiling drops: agencies cut Mexico’s growth over the annual USMCA; the peso didn’t flinch, the US moved it; Ebrard looks to Asia; and Monreal hands the fuel-theft charge back to the Treasury
Five minutes to understand the week.
The ceiling drops
Rating agencies cut growth over the USMCA
On July 1, the US formalized that it won’t extend the USMCA 16 years: the annual review to 2036 kicks in. HR Ratings redid its numbers and cut Mexico’s 2026 growth from 1.5% to 1.1% (Expansión).
The revealing part is the other cut: long-term potential growth fell from 1.85% to 1.5%. It’s not a bad quarter; it’s an economy whose ceiling is lowered. Consensus already sees Mexico growing below 2% (Bloomberg Línea).
BlackPaper Comment: The USMCA’s damage didn’t come via a tariff, it came via an expectation. The annual review doesn’t break the treaty: it strips its horizon, and with it long-term investment. Mexico didn’t lose the market; it lost a decade of growth.
The peso that didn’t flinch
The “no” to the USMCA didn’t move it; the US did
A punished peso was feared; it closed the week roughly flat, with a slim 0.16% gain, near 17.51. But it wasn’t local merit: on Friday, US jobs came in at 57,000 —half of what was expected— and knocked the dollar down (El Financiero).
The peso rose because the neighbor weakened, not because Mexico healed. The USMCA’s new regime set a ceiling that even a weak dollar can’t fully lift: the currency no longer trades its fundamentals, but the premium of a review that reopens every year.
BlackPaper Comment: A flat peso is not a safe peso. That the currency holds thanks to a bad foreign print —US jobs— isn’t strength: it’s borrowed luck. The dollar‘s weakness covered, for a week, the premium the USMCA already charges.
Ebrard looks to Asia
The official answer: less dependence, more homegrown production
Ebrard set Mexico’s answer to the “no”: cut external dependence and make at home what’s imported from Asia —penicillin, semiconductors—. At the same time, he touted the China relationship as “in a good moment” (Infobae).
The contradiction is plain: less Asia and more China at once. For the July 20 round he’ll bring three concerns, but denies seeking new treaties. The strategy sounds good; the instrument —a semiconductor industry— is a matter of years (Sin Embargo).
BlackPaper Comment: “Diversify” is the right word and the hardest. Making at home what today comes from Asia takes years and capital Mexico isn’t putting up, while 40% of its investment still comes from the neighbor it negotiates with blind.
Monreal hands the burden back
The fuel theft that funds campaigns: “prove it to the FGR”
On July 1, the US Treasury sanctioned a CJNG fiscal fuel-theft network and described —generically— that crime funds political campaigns. The substantive reply came from the Senate (Infobae).
Ricardo Monreal, Morena‘s Senate leader, asked Washington to prove to the FGR that the cartel financed Mexican politics. The move shifts the burden to the US and, in passing, admits the accusation is left hanging (Infobae).
BlackPaper Comment: Demanding proof is legitimate, and telling. When the ruling party asks another country’s Treasury to document what its own prosecutor won’t investigate, it confirms who keeps the ledger of the plunder —and who prefers not to.
The spending that isn’t spent
The deficit came in below plan, and that’s not good news
Between January and May, the public deficit was 418,749.5 million pesos, some 266 billion below what was programmed. The government presents it as fiscal discipline (SHCP).
But the adjustment didn’t come from revenue to spare, but from spending left unexecuted: an underspend. In an economy with falling growth, spending less than promised balances the paper, but chills activity further (SHCP).
BlackPaper Comment: A smaller-than-forecast deficit sounds like prudence; up close, it’s austerity by omission. The government hits the target by not spending what it promised —works, investment— just as the USMCA already cut its growth. It balances the books and pays in GDP.
In brief
The jobs number that knocked the dollar. The US added just 57,000 payrolls in June, half of what was expected; the dollar fell and the market again bet on a Fed cut in September (Investing).
The World Cup warning. The UK warned its travelers over crowds and theft; it lands after the deaths by asphyxia on Paseo de la Reforma. Sheinbaum: it’s “safe“ to visit Mexico (El Financiero).
The north without power. The week left the industrial north with blackouts at 47°C and CFE promising 244 billion pesos by 2030: firm power, the nearshoring hook, isn’t guaranteed today (El Imparcial).
Your face, the bank’s key. Since July 1, the CNBV made facial biometrics mandatory for bank operations above 140,000 pesos, with no clear opt-out (Legalario).
Colombia closes the Petro era. Abelardo de la Espriella was proclaimed president-elect by 0.004 points; he takes office on August 7. A rightward turn that costs Sheinbaum an ally (El Tiempo).
The week ahead
Jul 8 — FOMC minutes: with the Fed off forward guidance, every hint moves the peso.
Jul 9 — The big one: June inflation (INPC) and Banxico minutes; core stuck near 4% keeps the rate pinned at 6.50%.
Jul 10 — IMSS jobs for June and the trade balance: the real pulse.
Jul 20 — 3rd round of the USMCA: the first test of whether the annual review is procedure or leverage.