The Day at a Glance | December 24 2024

The Top

● According to Reuters, China plans a record issuance of special Treasury bonds worth $411 billion next year.

● Donald Trump’s unexpected threat to reclaim control of the Panama Canal and his expansionist declaration that the U.S. should own Greenland are signals that the incoming president is likely to pursue a complex foreign policy agenda.

● Today, financial markets will close at 1:00 PM in anticipation of Christmas Eve celebrations. Operationswill resume on December 26, following regular schedules.

● The Bank of Japan’s authorities agreed to continue raising interest rates if the economy evolves in line with their forecasts, though some emphasized the need for caution given uncertainty surrounding U.S. economic policy, as revealed in the minutes of their monetary policy decision.

● The Bank of Canada’s decision to cut rates by 50 basis points on December 11 was divided, with some board members suggesting a smaller reduction, according to minutes released on Friday.

● Oil prices rose on Tuesday, reversing losses from the previous session, supported by a slightly positive short-term market outlook despite thin trading ahead of the Christmas holiday.

Economic Environment

According to Reuters, China is planning a record issuance of special Treasury bonds worth $411 billion next year. Chinese officials have agreed to issue 3 trillion yuan ($411 billion) in special Treasury bonds next year, two sources told Reuters. This would mark the highest issuance on record as Beijing intensifies fiscal stimulus to revitalize the Chinese economy. This sovereign debt issuance plan for 2025 represents a sharp increase from this year’s 1 trillion yuan and comes as Beijing seeks to cushion the impact of a likely hike in tariffs on Chinese imports when DonaldTrump takes office in January. The proceeds from these bonds are expected to stimulate consumption through subsidy programs, encourage corporate equipment upgrades, and finance investments in advanced, innovation-driven sectors, among other initiatives. Overall, China’s economy has struggled this year amid a severe real estate crisis, high local government debt, and weak consumer demand. On the other hand, exports, one of the few bright spots in the economic outlook, may soon face U.S. tariffs if Trump follows through on his campaign promises. As such, while export risks suggest that China will need to rely on domestic growth sources, consumers are feeling constrained by declining real estate prices, minimal social safety nets, and subdued household demand.

Markets and companies

U.S. stock futures are trading with marginal upward movements ahead of the start of a session expected to see low volume, as the New York market will close operations at 1:00 PM EST today and will remain closed tomorrow for Christmas celebrations. Yesterday, the main stock indices ended the session with gains, amid expectations for a positive week due to the so-called “Santa Claus Rally,” a historical trend where the last weeks of December tend to show positive performance. Meanwhile, mixed movements were observed in Asian and European stock markets.

Treasury bond yields are trending higher in a week characterized by light activity and limited economic data releases due to the Christmas holiday. The 2-year bond is trading at 4.35% while the 10-year bond stands at 4.62%.

In the commodities market, oil is registering gains, reacting to data on manufactured goods and new home sales in the U.S., which continue to reflect the strength of the U.S. economy.

In Mexico, futures for the IPC index are showing upward movements, standing at 50,521 points.

As for the exchange rate, the Mexican peso is trading at 20.16 units per dollar, having reached a high of 20.20 during the early hours.

Corporate news

Televisa announced that Fitch Ratings has downgraded its Long-Term and Local Currency Issuer ratings to ‘BBB-‘ from ‘BBB’ and its senior unsecured foreign currency debt ratings to ‘BBB-‘ from ‘BBB’. Fitch Ratings also downgraded the Company’s National Long-Term rating to ‘AA+(mex)’ from ‘AAA(mex)’ and its senior unsecured local currency debt ratings to ‘AA+(mex)’ from ‘AAA(mex)’. The outlook for both ratings is Negative.

This morning, American Airlines had to ground its aircraft due to technical issues and a requirement from the Federal Aviation Administration (FAA). However, the aircraft resumed operations later the same day.