The Day at a Glance | April 11 2025

• Industrial production in Mexico surprised to the upside in February.
• In the U.S., producer prices for March came in at 2.7% y/y, below the market expectation of 3.3% y/y and the previous month’s 3.2% y/y.
• President Donald Trump threatened to impose tariffs on Mexico if it fails to deliver water from the Rio Grande to Texas, in accordance with the quota established in the 1944 bilateral treaty.
• China responded to the latest U.S. tariff threat by raising tariffs on U.S. imports to 125%.
• The European Central Bank may cut interest rates again at its next meeting on April 17^th. A 50-basis-point cut is being discussed amidst expectations of slower growth, inflation near its target level, and a recent 10% appreciation of the euro.
• A Reuters survey estimates that China’s economy could grow by 4.5% in 2025 and 4.2% in 2026, below the Communist Party’s official target of 5.0%. In this regard, additional stimulus measures are likely to be implemented to boost the economy.
• Oil prices are heading for their second consecutive weekly decline amidst investor concerns about a possible recession triggered by the escalating trade war between the United States and China.

Economic Environment

Industrial production in Mexico surprised to the upside in February. According to seasonally adjusted figures, industrial activity declined by -1.3% year-over-year, with mining contracting by -9.2% y/y, electricity, water, and gas generation and distribution falling by -1.2% y/y, construction rising by 0.4% y/y, and manufacturing declining by -0.4% y/y. On a monthly basis, industrial production rebounded by 2.5% in February, after falling -0.6% in January and -1.6% in December. Within the sectors, mining expanded by 0.8%, electricity, water, and gas generation and distribution decreased by -0.4%, while construction and manufacturing increased by 2.8% and 2.9%, respectively. Overall, the figures showed a significant rebound in February, possibly due to efforts to get ahead of tariffs that came into effect between March and April; however, we estimate that the trend could revert to a weaker state moving forward.

Markets and Companies

U.S. indexes were logging mixed movements this morning. Volatility remains high after a week marked by uncertainty surrounding the trade policy of Donald Trump’s administration. The recent confirmation of 145% tariffs on Chinese goods and China’s subsequent retaliation with 125% tariffs have intensified the trade conflict between the world’s largest economies. 

The European Union announced it will send a representative to Washington to reach trade agreements, prompting mostly negative reactions in European markets. Meanwhile, Asian markets closed with mixed figures following China’s retaliation announcement.

In commodities, oil prices were virtually unchanged, although on track for a weekly decline. The escalation of tariffs between the U.S. and China has sparked fears of a slowdown in global trade and reduced demand for energy.  

Gold, on the other hand, continues its upward trend, reaching up to $3,225 per ounce.

In the bond market, the yield on the 10-year U.S. Treasury rose to 4.48%, while the 2-year yield stood at 3.88%. The intensification of trade tensions has triggered an increase in yields.

In the local market, the IPC was trading higher at 51,699 points, while the exchange rate stood at 20.36 pesos per dollar, down from 20.46 in the previous session.

Corporate News

• JPMorgan Chase reported Q1 revenues of $46.01 billion, an 8% year-over-year increase, driven by strong performance in its equities trading business and higher fees from asset and investment management. Despite the positive results, CEO Jamie Dimon warned of an economy facing “considerable turbulence,” citing risks such as persistent inflation, high fiscal deficits, and trade tensions.
• Morgan Stanley posted record revenues of $17.74 billion in the quarter, a 17% year-over-year increase. Growth was led by its equities trading division, which saw a 45% revenue increase driven by higher institutional client activity in a volatile environment. Wealth management also grew 6%, reaching $7.33 billion in revenue.
• Wells Fargo reported revenues of $20.15 billion, down 1% year-over-year and below market expectations. While its adjusted earnings per share came in at $1.39 (+16% y/y), a 6% drop in net interest income negatively impacted overall performance. The bank warned of a less favorable economic environment in 2025 due to uncertainty stemming from U.S. trade policies.