Daily Brief | June 23 2025

Top News

·     The Mexican economy continues to show signs of weakness at the beginning of the second quarter.

·     In Mexico, retail sales declined in the fourth month of the year.

·     U.S. strikes on Iran have unsettled markets, causing drops in Asian currencies and equities, and pushing oil prices higher. Trump’s decision to target Iranian nuclear facilities has reignited fears of potential disruptions in Middle East energy supplies.

·     China strongly condemned the U.S. attack on Iranian nuclear sites, calling for all parties to agree to a ceasefire. Officials warned that U.S. actions could escalate the Iran-Israel conflict, and urged Iran not to close the Strait of Hormuz.

·     Eurozone PMIs showed the bloc’s economy stalled for a second consecutive month in June, with only minimal expansion. The services sector posted a slight improvement (50 vs. 49.7 prior), while manufacturing showed no recovery (49.4 vs. 49.4 prior). 

Economic Outlook

The Mexican economy continues to show weakness at the start of Q2. The Global Indicator of Economic Activity (IGAE), a monthly proxy for GDP, rose by 0.5% m/m in April 2025, based on seasonally adjusted figures. By sector, primary activities fell by -3.7% m/m, secondary activities grew 0.1% m/m, and tertiary activities increased 0.9% m/m. On an annual basis and with original figures, the IGAE declined by -1.5% in April 2025. Primary activities rose 3.5% y/y, secondary activities fell -4.0% y/y, and tertiary activities dropped -0.4% y/y. The IGAE decline reflects a weak economic environment, particularly in industry, which remains affected by lower levels of construction and manufacturing. While the monthly increase points to a slight rebound driven by services, continued weakness in secondary activities and volatility in the primary sector are limiting sustained economic growth.

In Mexico, retail sales dropped in the fourth month of the year. INEGI reported a -1.0% m/m decline in retail sales in April, reversing the 0.5% m/m rise recorded in March. On an annual basis and using original figures, retail sales fell -2.0%. Significant year-on-year declines were seen in hardware (-6.3%), motor vehicles (-5.5%), and food and beverages (-4.3%). Overall, retail sales ended a five-month streak of marginal growth, signaling weakened consumer demand in April.

Markets and Stocks

Futures on the main U.S. indices were trading with slight gains this morning following the surprise U.S. military strikes on Iranian nuclear facilities over the weekend. Despite the rise in geopolitical tensions, markets have responded in a muted manner, with investors watching closely for any Iranian retaliation. In Europe, equities posted modest declines, while Asian markets closed mixed. The focus remains on the Iran-Israel conflict and its potential impact on regional stability.

In commodities, oil prices continued to rise, reaching highs not seen since January following the U.S. attack. While Iran has threatened to close the strategic Strait of Hormuz, analysts believe such a move is unlikely in the short term. Meanwhile, gold remained stable, supported by safe-haven demand amid geopolitical uncertainty, though gains were capped by a stronger dollar.

In fixed income, U.S. Treasury yields were slightly higher. The 10-year yield stood at 4.34%, while the 2-year yield reached 3.89%, as investors weighed geopolitical risks and looked ahead to key economic data due this week.

In Mexico, futures on the local stock exchange were up 1.53%, while the peso traded around 19.21 per dollar, compared to 19.16 in the previous session.

Corporate News

à Novo Nordisk reported disappointing results for its obesity drug CagriSema and announced the termination of its partnership with Hims & Hers Health.

à BNY Mellon expressed interest in a possible merger with Northern Trust, prompting a positive reaction from the market.

à Energy stocks rose after Iran’s parliament backed closing the Strait of Hormuz, a key global crude oil trade route. Although the final decision lies with Iran’s national security council, markets responded to the increased risk of supply disruption.