Daily Brief | June 18 2025

Top News

·     In Mexico, aggregate supply and demand figures suggest the economy remains in a phase of weakness.

·     Later today, the Federal Reserve is expected to announce its monetary policy decision, where we anticipate it will leave the federal funds rate unchanged in the 4.25%–4.50% range for a fourth consecutive meeting.

·     Meanwhile, the U.S. Department of Commerce is investigating key sectors tied to national security—such as semiconductors and pharmaceuticals—for potential tariffs. Former President Donald Trump has already invoked Section 232 to impose duties on steel and aluminum imports, affecting nearly $200 billion in goods.

·     For the week ending June 14, 2025, initial jobless claims in the U.S. totaled 245,000, in line with market expectations and slightly below the previous week’s reading of 250,000.

·     Iran’s Supreme Leader Ayatollah Ali Khamenei rejected U.S. President Donald Trump’s demand for unconditional surrender on Wednesday, as Iranians jammed the highways out of Tehran fleeing from intensified Israeli airstrikes. 

Economic Outlook

In Mexico, aggregate supply and demand figures point to a phase of economic weakness. In the first quarter of 2025, aggregate demand—equal to aggregate supply—contracted by -1.1% quarter-over-quarter in real and seasonally adjusted terms. On the supply side, GDP grew by just 0.2% q/q, while imports of goods and services fell sharply by -4.3% q/q. On the demand side, private consumption declined by -0.4% q/q, government consumption rose 0.4% q/q, and gross fixed capital formation dropped -4.0% q/q. Exports, meanwhile, increased by 1.1% q/q. On an annual basis and using original figures, aggregate demand declined by -0.2% in Q1 2025 (vs. +1.9% in the previous quarter), gross fixed investment fell -5.2% (vs. -2.4%), private consumption contracted -0.6% (vs. +0.3%), government consumption increased by 1.5% (vs. +0.9%), and exports rose sharply by 12.8% (vs. 12.7%). Overall, the data suggest that at the start of 2025, the Mexican economy is experiencing a more pronounced slowdown, with exports remaining the main driver of growth, while private consumption and investment show significant declines.

Markets and Stocks

U.S. equity futures traded slightly higher this morning, as investors remained cautious ahead of the Federal Reserve’s monetary policy announcement, where rates are widely expected to remain unchanged. The focus will be on Jerome Powell’s remarks and the updated projections on the future path of interest rates. Geopolitical tensions continue to escalate after six consecutive days of attacks between Iran and Israel, with Donald Trump reportedly considering possible military retaliation.

In Europe, markets traded mixed following the latest UK inflation data, which eased to 3.4%, offering some relief to the Bank of England ahead of its policy meeting. In Asia, markets closed in positive territory.

In commodities, oil prices hovered near five-month highs, supported by the Iran-Israel conflict and the risk of U.S. military involvement. Gold held steady at $3,389 per ounce, with risk sentiment improving ahead of the Fed decision, while ongoing geopolitical uncertainty continues to lend support to the metal.

In fixed income, the U.S. 10-year Treasury yield edged down to 4.38%, while the 2-year yield stood at 3.94%, both awaiting the Fed’s policy message.

In Mexico, the peso traded at 18.97 per dollar, slightly firmer after closing at 19.03 the previous day.

Telcel, a subsidiary of América Móvil, was fined 1.78 billion pesos by Mexico’s Federal Telecommunications Institute (IFT) for engaging in anti-competitive practices. The company allegedly conditioned incentives to Oxxo and Impulsora de Mercados de México (IMMEX) to prevent them from selling SIM cards from rival operators between January 2021 and January 2024. The IFT determined that this conduct aimed to limit competitors’ market access and reduce consumer choice. Oxxo and IMMEX were also fined 19.5 million pesos each. Telcel plans to appeal the ruling, calling it arbitrary and disproportionate.

Separately, Fibra Next began the process to list its certificates on the Mexican Stock Exchange. The offering could raise between 8 and 11 billion pesos, according to the public offering notice. Although no official timeline has been provided, the transaction could prove positive for Funo, as it may help unlock the value of its industrial assets.

Corporate News

– The U.S. Senate approved the “GENIUS Act,” a bill establishing a federal regulatory framework for dollar-backed stablecoins such as USDC, issued by Circle Internet Group. The legislation marks a milestone for the crypto industry by providing greater legal certainty and paving the way for new issuers, thereby strengthening Circle’s position in the digital currency market.

–  The FDA granted orphan drug designation to CERo Therapeutics’ experimental leukemia treatment.

– Chemours cut its second-quarter EBITDA guidance, now expecting adjusted EBITDA between $215 and $225 million, citing weakness in key business segments and falling short of consensus estimates.