Mexican exports have continued to hold up well despite all the uncertainties around tariff policies and the USMCA, as well as the volatility in US auto import spending.

And now the economy shows incipient signs of a pickup at home, with better consumption and earnings numbers in the most recent data. It's still early days, and private borrowing and lending activity remains weak, but we'll be watching closely for a broader-based recovery ahead.

In terms of risks, we don't worry about balance sheets in Mexico per se; the external balance is solid, debt levels are moderate and inflation continues to fall. The main two variables to watch are (i) the worsening budget position and (ii) what still appears to be a somewhat expensive peso. If Mexico hits further volatility ahead, it's likely to come from one of these two sources.

We have been on the sidelines in Mexican asset markets, but will be watching the domestic cycle for indication of a potential return to equities.