Daily Brief | May 28 2025

Top News

·     In the United States, consumer confidence partially rebounds in May.

·     Later today, the Federal Open Market Committee’s monetary policy minutes will be released. We expect the minutes to shed light on the Fed’s stance amid ongoing uncertainty, likely reaffirming its cautious approach to future policy changes.

·     Mexico’s Secretary of Economy, Marcelo Ebrard, announced that formal negotiations to review the USMCA will begin in late September or early October, moving up the originally scheduled 2026 date.

·     The European Central Bank stated that Christine Lagarde is committed to completing her eight-year term as president, following a Financial Times report that she had discussions about potentially stepping down early to lead the World Economic Forum.

·     President Vladimir Putin has made ending the war in Ukraine conditional on Western leaders signing a written commitment to halt NATO’s eastward expansion and to lift a significant portion of the sanctions imposed on Russia. 

Economic Outlook

In the United States, consumer confidence partially rebounds in May. In the fifth month of the year, U.S. consumer confidence measured by the Conference Board surged to 98.0 points (previously 85.7), marking the strongest monthly increase in four years after five consecutive declines. The rise was mainly driven by improved expectations, helped by the temporary suspension of tariffs on Chinese imports, which eased inflation and logistics disruption concerns. While the current situation assessment also improved, the most notable change occurred in short-term expectations, reflecting greater optimism about employment, income, and economic activity, even though it remains below the threshold that typically signals a recession. Additionally, there was a rebound in the intention to spend on services and durable goods, which may signal a moderate revival in private spending. However, risks remain around the labor market and core inflation, in a context still shaped by restrictive monetary policy. Overall, May’s data suggests an improvement in consumer sentiment, though its persistence will depend on macroeconomic risks.

Markets and Stocks

Futures of the main U.S. stock indices were showing slight gains this morning, as investors await Nvidia’s earnings results and the Fed’s latest monetary policy meeting minutes. Meanwhile, European markets were mostly trading lower. Italian firm UniCredit stood out after increasing its stake in Greece’s Alpha Bank, although analysts noted a full acquisition is not imminent. Finally, Asian markets closed mixed.

In commodities, oil prices rose after the U.S. banned Chevron from exporting crude oil from Venezuela; expectations also remain for a possible OPEC+ production increase this weekend. Gold, meanwhile, rebounded to $3,314 per ounce.

In fixed income, the 10-year U.S. Treasury yield hovered around 4.46%, while the 2-year yield stood at approximately 3.96%, as investors looked for signals regarding the direction of monetary policy.

In Mexico, IPC futures were up +0.08%; meanwhile, the exchange rate stood at 19.29, compared to 19.27 in the previous session.

Corporate News

• Macy’s cut its earnings guidance for fiscal year 2025 due to higher tariffs and reduced discretionary spending. The CEO noted that the company will implement selective price increases and eliminate products with unsustainable margins to offset the tariff impact—a move welcomed by investors.

• Abercrombie & Fitch reported better-than-expected quarterly revenue and earnings, despite lowering its annual earnings forecast due to the effect of new tariffs.