The Day at a Glance | January 14 2025

The Top

• In the US, the Producer Price Index (PPI) set at3.3% at the end of 2024.

• According to a Reuters survey, China’s economic growth is expected to slow to 4.5% in 2025 and cool further to 4.2% in 2026.

• Investors are reducing expectations for near-term interest rate cuts in China, anticipating that the central bank will hold off on further easing due to persistent Yuan weakness.

• The Bank of Japan will discuss the possibility of raising interest rates next week, driven by the outlook for sustained wage increases and greater clarity on US policy following the inaugural speech of President-elect Donald Trump, Vice Governor Ryozo Himino stated.

• Joe Biden´s team is finalizing rules that will effectively ban almost all Chinese cars and trucks from the US market as part of measures to restrict the use of Chinese-origin software and hardware in vehicles.

• On Tuesday, negotiations resumed in Qatar to finalize details of a plan to end the war in Gaza after US President Joe Biden indicated that a ceasefire and hostage release agreement was imminent.

• Oil prices paused their rally on Tuesday but remained near a four-month highs as the market focused on the impact of new US sanctions on Russian oil exports to key buyers like India and China.

Economic Environment

In the US, the Producer Price Index (PPI) set at 3.3% at the end of 2024. The Bureau of Labor Statistics (BLS) reported that producer inflation rose 0.2% m/m on a seasonally adjusted basis, following increases of 0.4% m/m in November and 0.2% m/m in October. In December, the entire increase was attributed to a 0.6% m/m rise in goods prices, while services remained unchanged. The core PPI, excluding energy and food, also stagnated according to seasonally adjusted figures. Year-over-year, PPI inflation stood at 3.3%, with core inflation at 3.8%, both slightly below market consensus estimates of 3.4% and 3.8%, respectively. Overall, cost pressures remained somewhat contained at the end of last year, as much of the rise in goods prices was driven by the energy component. As such, cost pressures at the close of 2024 are not a significant concern.

Markets and Companies

Futures for major US stock indices were trading higher, reacting to December’s Producer Price Index, which loggeda monthly increase of 0.2%, below expectations. Tomorrow, the Consumer Price Index will be released, providing the market with greater clarity on the inflation trajectory and the Federal Reserve’s potential monetary policy stance. On the corporate front, the 4Q24 earnings season kicks off in the US this week with reports from major banks: JPMorgan Chase, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, and Bank of America. In Europe and Asia, stock markets recorded mixed movements.

In the debt market, US Treasury yields retreated after the 10-year bond reached its highest level in 10 months. The 2-year bond is trading at 4.38%, while the 10-year bond is at 4.78%.

In Mexico, futures for the IPyC index were trading higher.

As for the exchange rate, the Mexican peso is trading at 20.61 per US dollar, after reaching a high of 20.66 overnight.

Corporate News

• KB Home shares rose nearly 9% as the homebuilder reported better-than-expected quarterly results.

• Teladoc Health announced a partnership with Amazon to make its virtual programs for diabetes, hypertension, and weight management available on the platform.