Daily Brief | June 4 2025

Top News

·     In Mexico, gross fixed investment and private consumption showed mixed data in March.

·     President Donald Trump signed an executive order doubling tariffs on steel and aluminum imports from 25% to 50%, effective June 4th, to protect the local industry. Mexico will request to be excluded from the tariff increase.

·     The ADP private employment survey reported the creation of 37,000 jobs in May 2025 (vs. 60,000 prior), well below market expectations of 115,000. It was the weakest gain since March 2023.

·     The White House informed trade partners that the 90-day tariff truce will end in July. Washington expects new proposals before July 9th to avoid the imposition of tariffs.

·     Donald Trump reiterated on Wednesday his call for Federal Reserve Chair Jerome Powell to lower interest rates, emphasizing that payroll firm ADP reported a slowdown in job creation during May. 

Economic Outlook

In Mexico, gross fixed investment and private consumption showed mixed results in March. Gross fixed investment fell 0.2% year-over-year in March 2025, based on original figures. Within the data, construction declined 0.1% y/y, while machinery and equipment purchases dropped 0.4% y/y, both using unadjusted figures. By segment, private investment grew 2.3% y/y, while public investment plunged 19.3% y/y. On a seasonally adjusted monthly basis, investment rose 0.3% in March. Meanwhile, private consumption in Mexico increased 1.2% y/y in March 2025 based on original data (vs. -1.9% prior). Within the breakdown, spending on imported goods rose 1.6% y/y, while spending on domestic goods and services also rose 1.6% y/y. On a seasonally adjusted monthly basis, private consumption fell 0.2% in March, following a surprising 1.4% m/m increase in February. Overall, the March data points to a mixed environment for investment and consumption in Mexico. While investment saw a slight monthly rebound, it continues to show annual weakness, mainly due to the sharp drop in public investment. In contrast, private consumption grew on an annual basis, though monthly figures suggest a slowdown after a strong February rebound.

Markets and Stocks

In the United States, futures for the main equity indices were trading slightly higher this morning after the ADP private payroll report showed job creation below expectations. Additionally, Nvidia reclaimed its position as the most valuable company in the world, surpassing Microsoft. Investors remain focused on U.S.–China trade tensions after President Trump said it’s “extremely difficult” to negotiate with the Chinese leader.

In Europe, markets were mostly trading higher, supported by gains in the industrial and mining sectors, along with optimism over Bulgaria’s potential entry into the eurozone in 2026.

In Asia, markets closed in positive territory. In South Korea, candidate Lee Jae-myung was announced as the election winner.

In commodities, oil prices retreated slightly, pressured by rising OPEC production and global economic concerns. However, risks remain due to wildfire-related supply disruptions in Canada and the lack of progress in U.S.–Iran nuclear talks. Meanwhile, gold was up 0.2%.

In fixed income, U.S. Treasury yields continued to trend lower. The 10-year bond was trading at 4.40% and the 2-year at 3.92%, amidst anxiety over the steel tariffs that took effect today and ahead of the Fed’s Beige Book release.

In local markets, futures for Mexico’s IPC index were up 0.16%. The exchange rate stood at 19.19 pesos per dollar, after closing the previous session at 19.23.

Volaris announced a partnership with China’s Hainan Airlinesto establish a codeshare agreement in the second half of 2025. The collaboration aims to expand connectivity between both countries and strengthen their international presence.

Corporate News

• Hewlett Packard Enterprise beat quarterly expectations and raised its earnings guidance. The company reported revenue of $7.63 billion and adjusted earnings of $0.38 per share, significantly surpassing estimates. It also noted that most of its products comply with the USMCA agreement, which should limit the impact of tariffs.

• The Federal Reserve lifted the asset cap imposed on Wells Fargo in 2018, allowing the bank to resume growth after years of regulatory restrictions stemming from past scandals.

• Constellation Energy announced a 20-year agreement with Meta to supply nuclear energy from its Illinois plant. The deal secures the reactor’s operational viability and supports its relicensing process, strengthening the company’s long-term revenue stream.