Daily Brief | May 26 2025

Top News

*In Mexico, the current account deficit was significantly reduced.

*Financial markets in the United States will be closed in observance of Memorial Day.

*U.S. President Donald Trump postponed until June 9 the deadline to impose 50% tariffs on European products, seeking more time to reach bilateral agreements with key countries in the bloc.

*Donald Trump declared he is “absolutely” considering imposing sanctions against Russia if the attacks in Ukraine do not cease. He stated that any measures would depend on diplomatic progress and international pressure.

*Chinese President Xi Jinping is considering relaunching a new stage of the “Made in China” plan to strengthen strategic sectors, despite tensions with the U.S. and efforts to rebalance the economy.

*At a conference in Tokyo, central bank leaders warned about a tighter global environment, with slow growth, persistent inflation, and economic fragmentation that challenges conventional policies. 

Economic Outlook

In Mexico, the current account deficit was significantly reduced. During the first quarter of 2025, the current account—which includes the trade balance, remittances, and transfers with the rest of the world—recorded a deficit of $7,613 million, down from the $22,207 million deficit seen a year earlier. As a percentage of GDP, the deficits stood at -1.8% and -4.7%, respectively, for the same periods. The reduction in the deficit is mainly explained by a contraction in outward payments, particularly due to lower reinvestment of earnings from foreign investment. So far this year, the global trade outlook has become more complicated, especially due to changes in U.S. trade policy. Additionally, the Central Bank of Mexico report noted that during this period, the Mexican economy continued to attract external resources, for example receiving $21,373 million in foreign direct investment and $10,914 million in portfolio investment. Overall, Mexico’s current account deficit was considerably reduced, as typically happens when the Mexican economy goes through periods of economic weakness.

Markets and Stocks

In the United States, stock markets will not operate due to Memorial Day. Last week, the market came under pressure from the congressional approval of the new tax law, which is estimated to worsen the U.S. fiscal situation. In reaction, the yield on the 30-year Treasury bond surpassed the 5% level. On the other hand, investors continue to assess the progress of trade negotiations. In this regard, Donald Trump announced an extension for the implementation of tariffs on European Union imports, aiming to prolong negotiations. European stock markets reacted positively. However, the U.S. president stated that Apple products not manufactured in the U.S. would be subject to tariffs. This week, on the corporate front, notable releases will include earnings reports from companies such as Nvidia and Dell. Regarding economic data, investors will be closely watching the release of the Federal Reserve’s monetary policy minutes, and by the end of the week, the inflation figures for April are expected.

In the commodities market, oil was trading higher after the pause on European Union tariffs announced by Donald Trump, while gold was trading lower.

In Mexico, the exchange rate stood around 19.20 pesos per dollar, showing a slight variation from its last close.

Corporate News

*Swedish automaker Volvo announced it will cut 3,000 jobs as part of a cost-cutting program in response to the challenges the industry faces from trade tensions and economic uncertainty. Of the total, about 1,200 cuts will affect employees in Sweden, and another 1,000 will affect consultants, mainly in Sweden as well.

*The U.S. Department of Justice announced it has reached an agreement with Boeing that will allow the company to avoid criminal prosecution related to the two crashes of its 737 Max aircraft, which caused the deaths of 346 people. The agreement, known as a “non-prosecution agreement,” cancels the trial that was scheduled for next month.