The Day at a Glance | April 8 2025

Citi’s Survey forecasts slower economic growth in 2025, with some estimates within the survey already pointing to a potential recession.

• China’s Ministry of Commerce warned it will take countermeasures if the U.S. imposes new tariffs, stating it will protect its interests in bilateral trade with Washington.

• The European Union proposed eliminating all tariffs on U.S. industrial goods in an effort to maintain access to the American market amidst Trump’s trade policy.

• Treasury Secretary Scott Bessent said tariff negotiations could extend until June, as around 70 countries have reached out to the United States.

• Donald Trump ordered a review of the possible acquisition of U.S. Steel by Japan’s Nippon Steel to assess whether further action is necessary. Both companies had sued the U.S. government in January after former President Joe Biden blocked the $14 billion deal on national security grounds.

• Oil prices held steady on Tuesday, though near four-year lows, as a recovery in equity markets was offset by growing recession fears, exacerbated by the trade conflict between the U.S. and China—the world’s two largest economies.

Economic Environment

Citi’s Survey projects slower economic growth in 2025, with some estimates within the survey already pointing to a potential recession. The consensus revised its growth forecast for Mexico´s economy down from 0.6% to 0.3% for 2025, and from 1.7% to 1.5% for 2026. Additionally, the survey showed that respondents slightly lowered their estimate for headline inflation this year from 3.80% to 3.78%, while keeping the forecast unchanged at 3.78% for next year. Meanwhile, the consensus continues to expect that the Central Bank of Mexico will cut the policy rate by 50 basis points on May 15^th. The year-end forecast for the policy rate was maintained at 8.00% for 2025, while the estimatefor the end of 2026 was revised down from 7.50% to 7.00%. Regarding the exchange rate, the peso is now expected to close 2025 at 20.90 per U.S. dollar (previously 20.98) and 2026 at 21.50 (previously 21.30). Overall, Citi’s survey suggests the economy will grow less than previously expected, with some forecasts already pointing to a recession—the most pessimistic scenario being a -0.5% contraction.

Markets and Companies

The U.S. stock market is trading higher, rebounding after sharp declines in recent sessions caused by the announcement of new tariffs on imports to the U.S. With this context, there is some hope that negotiations may begin and tariffs could be reduced. Treasury Secretary Scott Bessentnoted that around 70 countries have approached the U.S. to initiate talks; however, the issue continues to generate uncertainty.

On the corporate front, the 1Q25 earnings season kicks off this week. Financial institutions such as BlackRock, JPMorgan, Morgan Stanley, and Wells Fargo will report their results on Friday. The consensus expects S&P 500 companies to post year-over-year earnings growth of 7.8% for the quarter, with a focus on the impact tariffs may have on individual firms.

Treasury yields are rising, with the 2-year yield at 3.82% and the 10-year yield at 4.23%. The tariff issue and the increasing likelihood of a U.S. economic slowdown have led markets to price in more rate cuts by the Fed.

As for commodities, oil prices are showing more stability after recent declines, while gold continues its upward trend.

The exchange rate stands at 20.57 pesos per U.S. dollar, compared to yesterday’s 20.67 at market close. 

Volaris published its March passenger traffic report, recording a 12.3% increase in total traffic, with notable improvements in the domestic market. In terms of capacity, it expanded by 10.9%, driven by a larger increase in domestic capacity (13.3%). These figures indicate that during 1Q25, capacity recovered by 6.3%, a figure below the airline’s initial forecast at the beginning of the year (+7%).

Corporate News

• Lockheed Martin shares rose 2% after news broke that Vietnam plans to purchase defense and security products from the U.S. as part of a strategy to reduce its trade deficit.

• Broadcom shares rallied after the company announced the authorization of a $10 billion share repurchase program through the end of the year. According to the CEO, this decision reflects the board’s confidence in the strength and diversification of its semiconductor and infrastructure software businesses.

• Shares of insurance companies rose after reports circulated that the Trump administration plans to increase Medicare payment rates for insurers by 5.0% next year—exceeding the 2.23% increase proposed by the Biden administration. Humana was up 15%, CVS Health 9%, and UnitedHealth 8%.