KBRA and DBRS affirm Mexico's sovereign debt rating

Alejandro Alegría

La Jornada Newspaper, Saturday, May 3, 2025, p. 15

Given sound economic management and solid macroeconomic fundamentals, KBRA and DBRS reaffirmed Mexico's long-term foreign currency debt rating at BBB.

These ratifications will allow Mexico to continue accessing domestic and international financial markets under favorable conditions. The Ministry of Finance and Public Credit (SHCP) reiterates its commitment to stable public finances and a sustainable debt trajectory , the agency said in a statement.

The KBRA agency emphasized that Mexico's rating considers expectations for overcoming the crisis generated by the imposition of tariffs by the U.S. administration.

DBRS indicated that the Mexican economy has maintained solid fundamentals through a series of shocks, due in large part to its robust policy framework, comprised of exchange rate flexibility, sound banking regulation, and a credible inflation-targeting regime. Despite the weak economic outlook, the (Claudia) Sheinbaum administration is pursuing fiscal consolidation with the goal of stabilizing debt as a percentage of GDP , it added.

Reuters and AFP

La Jornada Newspaper, Saturday, May 3, 2025, p. 16

Washington. American employers added 177,000 jobs in April, exceeding expectations. While job growth slowed marginally, the labor market showed resilience in the face of President Donald Trump's trade wars.

Hiring declined slightly from 185,000 in March, but exceeded economists' expectations of 135,000. The unemployment rate remained at 4.2 percent, a level considered low, the Department of Labor reported yesterday.

Sectors such as healthcare, transportation and warehousing, financial services, and social assistance accounted for a significant portion of the hiring.

Following the release of the data, Trump took to his Truth Social account to highlight the strong employment figures and reiterated his call for the Federal Reserve (Fed) to lower interest rates. "As I said, we are in a transitional phase, just beginning! " he wrote.

Since returning to power, the Republican has taken steps to reduce the number of civil servants and embarked on a trade war that economists say is likely to slow growth and increase inflation.

Because the tariff program is in its early stages, its impact has not been reflected in hiring, but the outlook for the labor market is becoming increasingly dim as Trump's aggressive tariff policy increases economic uncertainty.

While the labor market continues to show resilience, amid employers' reluctance to lay off workers following the difficulties in finding labor during and after the COVID-19 pandemic, warning signs are mounting. Analysts believe that tariffs will hinder job creation in the future.

Amid the swirl of uncertainty, the Fed is expected to keep its benchmark overnight interest rate in the 4.25-4.5 percent range next week.

More layoffs in the government

The number of U.S. government workers fell for the fourth consecutive month in April, with non-postal employment declining by 8,500, as Donald Trump and adviser Elon Musk aim for drastic cuts to the federal workforce.

Federal civilian employment fell by 9,000 people in April, has decreased by 26,000 so far this year, and 200,000 people have been laid off since Trump took office and appointed Tesla CEO Musk to head the Department of Government Efficiency, tasked with cutting costs and slimming the ranks of government workers. The department itself has not released its figures.

Reuters and the Editorial Staff

La Jornada Newspaper, Saturday, May 3, 2025, p. 16

The Mexican peso gained marginally yesterday after better-than-expected US employment data was released, easing some of the anxiety over the tariffs imposed by Donald Trump.

In wholesale trading, the peso closed higher at 19.59 pesos per dollar, compared to 19.61 the previous business day, according to the Bank of Mexico's closing price. The exchange rate reached as high as 19.69 pesos per dollar. Despite the recovery, the weekly decline ended with a slight 7 cents (0.39 percent).

Locally, the central bank released its March remittance report, which increased 2.7 percent year-over-year to $5.15 billion, closing the first quarter with a 1.3 percent annual increase.

After Thursday's Labor Day break, investors also focused on the Bank of Mexico's survey of private-sector analysts, who lowered their expectations for gross domestic product expansion for 2025 to 0.20 percent, down from 0.50 percent previously.

Oil prices fall almost 10%

Oil prices fell, closing with their biggest weekly losses since late March, as traders grew cautious ahead of an OPEC+ meeting to decide the group's output policy for June.

Mexican export crude lost $1.11, settling at $54.68 per barrel; it plummeted $5.55 for the week, or 9.21 percent.

Brent crude fell 84 cents to $61.29 a barrel; U.S. WTI crude fell 95 cents to $58.29. Brent crude fell about 8.6 percent and WTI crude fell 8 percent for the week.