The Day at a Glance | January 10 2025

The Top

• In the US, employment figures surprised the market consensus.

• Industrial production could increase less than 1.0% in 2024.

• China’s central bank is expected to take on its most aggressive monetary tactics in a decade this year to stimulate the economy and mitigate the impact of impending US tariff increases.

• Germany’s trade surplus with the US is on track to reach a record level just before President-elect Donald Trump assumes office at the White House, according to an analysis of data from Germany’s statistics office.

• Sustained wage growth prospects in Japan, along with the impact of higher import costs due to a weak yen, have heightened the central bank’s focus on rising inflationary pressures.

• According to Reuters, NATO will not follow Donald Trump’s proposal for a massive increase in defense spending but will likely agree to exceed its current target.

• Oil prices surged on Friday, heading for their third consecutive week of gains, as traders focused on potential supply disruptions due to new sanctions on Russia and Iran.

Economic Environment

In the US, employment figures surprised the market consensus. The Bureau of Labor Statistics (BLS) reported that nonfarm payrolls increased by 256,000 jobs in December 2024, significantly surpassing the consensus estimate of 160,000. Additionally, employment figures for October and November were revised down by a combined 8,000 jobs. Meanwhile, the unemployment rate stood at 4.1% in December, below both market expectations and November’s 4.2%. Annual wage growth in December reached 3.9%, slightly below the 4.0% recorded in the prior two months. Overall, December’s employment data continued to highlight the strength of the US economy. Afterthese figures were made public, the 10-year Treasury yield rose from 4.70% to 4.78%.

Industrial production could increase less than 1.0% in 2024. November´s data revealed a -1.4% annual decline in Mexico’s industrial activity, according to original figures. Within the sector, only water and gas generation and distribution posted an annual rise (2.9%), while mining (-4.7%), construction (-4.2%), and manufacturing (-0.2%) recorded declines. Cumulatively, industrial production increased by 0.5% in January–November 2024 compared to the same period last year, based on seasonally unadjusted data. On a monthly basis, seasonally adjusted figures for November logged a 0.1% increase in industrial production. By sub-sector, manufacturing rose 0.7% m/m, mining rose0.4% m/m, and water and gas generation and distribution increased 0.8% m/m, while construction contracted by -1.8% m/m. Although November’s data signaled growth in several areas, the slowdown in construction largely overshadowed these gains.

Markets and Companies

US futures decreased as investors digested the region’s latest employment report. Nonfarm payrolls increased by 256,000 in December, surpassing both November’s 212,000 and Dow Jones’ forecast of 155,000. The unemployment rate dropped to 4.1%. In Europe, markets logged mixed performance, while British bond yields remained at all-time highs. Meanwhile, Asian markets closed lower, affected by the People’s Bank of China’s decision to temporarily suspend bond purchases.

In commodities, oil prices recorded significant gains, driven by expectations of further sanctions on Russia and Iran, as well as increased demand due to cold temperatures in the US and Europe. Metals are up, with gold reaching $2,674 per ounce.

In fixed income, the yield on the 2-year US Treasury bond rose to 4.37%, while the 10-year yield increased to 4.78%.

In Mexico, IPC futures are trading higher at 50,375 points. Regarding the exchange rate, the peso traded at 20.61 pesos per dollar, below yesterday´s 20.52 at market close.

Corporate News

• Insurers such as Allstate, Travelers, and Chubb logged declines after wildfire loss estimates in Los Angeles surged, potentially exceeding $20 billion.

• Delta Air Lines exceeded expectations in the fourth quarter, reporting adjusted earnings of $1.85 per share and $14.44 billion in revenue. For 2025, the airline forecasts $3 to $5 billion in free cash flow, driven by strong travel demand and 7%-9% revenue growth.