Daily Brief | June 5 2025

Top News

·     The European Central Bank (ECB) cut interest rates for the eighth consecutive meeting amid ongoing trade tensions with the U.S.

·     President Donald Trump signed an executive order restricting entry into the United States for citizens from 12 countries, citing national security concerns.

·     The Congressional Budget Office estimates that Trump’s new tax law will reduce government revenues by $2.4 trillion over a decade, a figure lower than previous projections.

·     For the week ending May 31, 2025, initial jobless claims in the U.S. came in at 247,000 (235,000 expected), up from 239,000 the previous week.

·     Mexico’s Consumer Confidence Index rebounded in May after six straight months of decline, reaching 46.7 points—its highest level so far this year. The increase reflected improved household perceptions of both current and future economic conditions. 

Economic Outlook

The European Central Bank (ECB) cut interest rates for the eighth consecutive meeting amid trade tensions with the U.S. The ECB lowered the deposit rate from 2.25% to 2.00%, a level it considers “neutral,” meaning it neither stimulates nor restricts economic activity. In addition, it reduced the main refinancing rate from 2.40% to 2.15%, and the marginal lending rate from 2.65% to 2.40%, effective June 11. While it did not commit to further cuts, the Governing Council kept all options on the table and reiterated a data-dependent approach going forward, assessing each decision based on the economic outlook—especially in a context of exceptional uncertainty. With this move, the ECB cut rates for the eighth time, acknowledging that inflation is under control and shifting its focus to the region’s weak economic performance amid rising risks of a trade war with the U.S. The bank’s new projections forecast GDP growth of 0.9% in 2025, which could be affected by the deterioration of international trade. However, the ECB highlighted that increased government spending on defense and infrastructure would help support activity in the medium term. Markets are generally expecting a pause at the July meeting, though there is room for further cuts in the second half of the year if conditions allow

Markets and Stocks

Futures for major U.S. stock indexes were trading in positive territory. Investors are focused on the release of jobless claims data, which came in above expectations. European markets are also posting gains following the ECB’s announcement of a 25 basis-point cut in its benchmark rate, bringing it to 2.0%. Meanwhile, Asian markets closed mixed, with Japan leading the losses.

In the commodities market, oil prices posted slight gains, despite increased gasoline and diesel inventories in the U.S., and a price cut for crude by Saudi Arabia. Gold remained near $3,377 per ounce.

In fixed income, the yield on the 10-year U.S. Treasury bond held at 4.35%, while the 2-year bond stood at 3.86%.

In Mexico, the IPC futures were up 0.35%, while the exchange rate stood at 19.20 pesos per dollar, a slight depreciation from 19.16 the previous day.

Volaris reported preliminary traffic results for May 2025. During the month, capacity (ASMs) rose 9.0% year-over-year, while RPMs increased by 3.5%. The load factor stood at 81.8%, down 4.3 percentage points. In total, Volaris transported 2.5 million passengers in May.

Corporate News

• Circle Internet Group priced its Initial Public Offering (IPO) at $31 per share, above expectations. The company, known for issuing the USD Coin stablecoin, increased the number of shares offered from 32 million to 34 million due to strong demand.

• CyberArk Software announced plans to issue $750 million in convertible notes. The company stated it would use the funds to strengthen its identity security platform and for general corporate purposes.