Daily Brief | June 24 2025

Top News

·     In Mexico, overall inflation for the first half of June stood at 4.51%.

·     Israel attacked Iran again on Tuesday despite US President Donald Trump saying there would be a ceasefire.

·     Federal Reserve Chairman Jerome Powell said more time is needed to see if tariffs will cause higher inflation before considering interest rate cuts.

·     Annual consumer inflation in Canada remained at 1.7% in May, unchanged from the previous month. 

Economic Outlook

In Mexico, overall inflation for the first half of June stood at 4.51%. INEGI reported that the National Consumer Price Index for the first half of June registered a change of 0.10%, slightly below the market consensus expectation of 0.12%. In its annual change, overall inflation for the first half of June was 4.51%. The items with the greatest upward influence on inflation were home ownership, air transport, and snack bars, diners, torta shops, and taco restaurants. Core inflation, which excludes the most volatile items, such as energy and agriculture, and government tariffs, grew by 0.22% in the first half of June, above the consensus estimate of 0.17%. In its annual variation, core inflation stood at 4.20%. By component, goods rose 3.84% y/y and services 4.61% y/y. Regarding the most volatile items, i.e., non core inflation, it stood at 5.25% y/y. Overall, inflation in the first half of June surprised the market consensus with a higher-than-expected core reading, although overall inflation was slightly lower due to a decline in various agricultural and energy items. We believe that these data will not change the Bank of Mexico’s decision to cut rates by 50 basis points this week.

Markets and Stocks

U.S. stock markets opened higher on Tuesday, buoyed by the possibility of a ceasefire between Israel and Iran, which has boosted appetite for risk assets. Optimism is also supported by expectations that the conflict will not escalate beyond current tensions, despite mutual accusations of violations of the agreement. With the immediate risk apparently contained, investors’ focus returns to the macroeconomic outlook, the upcoming corporate earnings season, and trade negotiations.

In the Treasury bond market, yields are rising moderately after Federal Reserve Chairman Jerome Powell reiterated that there is no urgency to cut rates, highlighting the need to keep inflation expectations in check in a still uncertain environment. The 2-year bond is at 3.85% and the 10-year bond is at 4.36%.

In commodities, oil extended its decline for the second consecutive day, as fears of supply disruptions eased following the truce between Israel and Iran. Gold fell sharply to a two-week low, affected by the rebound in risk appetite and the prospect that interest rates will remain high for longer.

In Mexico, the exchange rate stood at around 19.05 pesos per dollar, compared to 19.11 at the close of the previous session.

Banco Compartamos, Gentera’s main subsidiary, successfully placed a total of $2 billion through two public offerings of $1 billion pesos each. The first issue has a 5-year term and a rate of TIIE Fondeo + 105 bps, while the second has a 6-year term and a rate of TIIE Fondeo + 110 bps.

Corporate News

à Airline stocks rose after oil prices fell, driven by President Trump’s announcement of a ceasefire between Iran and Israel. The move eased concerns about the sector’s operating costs, benefiting companies such as Frontier, United, American, Delta, JetBlue, Alaska Air, and Southwest.

à Defense sector stocks fell after Trump confirmed the entry into force of a ceasefire in the conflict between Iran and Israel, amid expectations of reduced geopolitical tension and a decline in immediate demand for military equipment.

à Carnival shares rose on the day before the release of its second-quarter financial report. The market anticipates positive results, with an increase in profits and revenues, which has raised expectations about the cruise company’s performance.