The Day at a Glance | February 6 2025

The Top

• Citi’s survey estimates that the Central Bank of Mexico will cut the funding rate by 50 basis points.

• Mexico’s consumer confidence index continued to decline in January, reaching 46.7 points, below the revised 47.0 from the previous month, amidstgrowing concerns about the impact of the new US administration.

• In the week ending February 1^st, 2025, initial unemployment insurance claims in the US stood at 219,000 (213,000 expected), rising from the previous week’s 208,000.

• China filed a complaint with the WTO against the new 10% tariff imposed by US President Donald Trump on Chinese imports and the removal of the tariff exemption for low-value packages, arguing that these measures are “protectionist” and violate WTO rules.

• ECB interest rates have room for further cuts as inflation moderates, said ECB board member PieroCipollone. However, he warned that the US administration’s trade war with China could negatively impact the Eurozone.

• On Thursday, the Bank of England cut interest rates after halving its growth forecast for this year and stating that the inflation rebound will be temporary. Additionally, two officials voted in favor of a more aggressive cut.

• Oil prices rose slightly on Thursday after Saudi Arabia’s state oil company significantly raised its prices for March. However, the gains barely offset the previous day’s decline.

Economic Environment

Citi’s survey estimates that the Central Bank of Mexicowill cut the funding rate by 50 basis points. The consensus in Citi’s survey expects the Central Bank of Mexico to cut the funding rate by 50 basis points today. For the rest of the year, the surveyed analysts estimate that the funding rate will end 2025 at 8.50% and 2026 at 7.50%. Regarding GDP growth, the survey estimates that the economy will expand by 1.0% in 2025 and 1.8% in 2026. Meanwhile, the exchange rate is expected to close 2025 at 21.0 pesos per dollar (previously 20.95) and 2026 at 21.30 (previously 21.49). For inflation, the consensus forecasts that in January 2025, the national consumer price index will rise by 0.33%, while the core component will increase by 0.44%. By the end of 2025, headline inflation is expected to reach 3.90% and core inflation 3.74%.

Markets and Companies

US stock futures were trading higher this morning as investors awaited a new round of corporate earnings reports, including Amazon. Meanwhile, shares of Alphabet and AMD were declining following their quarterly results.

In Europe, markets were also trading higher, boosted by strong corporate earnings and a rate cut by the Bank of England. The FTSE 100 reached a new all-time high after the decision, while the British pound weakened on expectations of further cuts. In Asia, markets closed with gains.

In commodities, oil prices were rebounding after Saudi Arabia announced a price increase for its crude exports in March. However, rising US inventories and new tariffs between the US and China continued to increase uncertainty. Meanwhile, gold was down to $2,862 per ounce after hitting a new high on Wednesday.

In fixed income, US Treasury yields were slightly higher, with the 10-year note at 4.43% and the 2-year note at 4.21%.

In Mexico, the IPC futures were trading higher at 51,930 points, while the exchange rate stood at 20.62 pesos per dollar, compared to 20.58 at market close yesterday. 

Cemex reported 4Q24 results that were mostly in line with expectations. Revenue fell 5% y/y, while EBITDA declined 3% y/y, although the EBITDA margin improved by 4 basis points. For 2025, the company expects stable EBITDA and low single-digit growth in cement and concrete volumes.

Corporate News

• Qualcomm exceeded expectations in its latest report, posting revenue of $11.67 billion ($10.93B expected) and adjusted EPS of $3.41 ($2.96 expected). Growth was strong across all segments, with a 13% increase in mobile and a 61% rise in the automotive segment. 

• Eli Lilly reported mixed 4Q24 results, with revenue of $13.53 billion ($13.57B expected) and adjusted EPS of $5.32 ($4.95 expected). Despite strong demand for drugs like Zepbound and Mounjaro, sales came in below expectations. The company reaffirmed its 2025 revenue guidance of $58-61 billion.