The Day at a Glance | January 24 2025

The Top

• The Bank of Japan raised its interest rates to 0.50% and announced that it will continue its rate hiking cycle, although it is expected to proceed gradually.

• In Mexico, the Global Economic Activity Indicator (IGAE), a proxy for monthly GDP, rose by 0.4% m/m in November after falling by -0.7% in October, according to seasonally adjusted figures.

• The Federal Reserve is expected to keep interest rates unchanged in its meeting next week. However, the main focus will be on how it addresses the president´s first measures. 

• US President Donald Trump and his team have acted with surprising speed to begin removing or sidelining hundreds of government workers while seeking to gain the power to dismiss hundreds of thousands more.

• Eurozone PMI´s showed that the economic block’s business activity returned to growth in January, with the composite PMI rising from 49.6 in December to 50.2 at the start of 2025.

• UK PMI´s indicated a slight rebound in business activity growth in January, although job cuts continued, and cost inflation reached its highest level in 20 months.

• Oil prices edged up slightly on Friday but were on track to post a weekly decline after the US president announced extensive plans to boost domestic production and called on OPEC to lower crude prices.

Economic Environment

The Bank of Japan raised its interest rates to 0.50% and announced that it will continue its rate hiking cycle, though it is expected to proceed gradually. The Bank of Japan increased its reference rate by 25 basis points, raising it from 0.25% to 0.50%, the highest level in 17 years. Additionally, Japan´s Central Bank revised its inflation forecasts upward, estimating that general inflation will reach 2.7% in the 2024 fiscal year (prev. 2.5%), 2.4% in 2025 (prev. 2.1%), and 2.0% in 2026 (prev. 1.9%). This signalsthat the ongoing wage increases in the economy are expected to keep inflation around the 2.0% target. Looking ahead, Bank of Japan Governor Kazuo Ueda mentioned that the trajectory for interest rates remains skewed upward, although the pace has not yet been determined. However, Ueda clarified that rates are still a ways from reaching their neutral level, which, according to the Bank’s staff estimates, couldrange between 1.0% and 1.25%. The analysts’ consensus suggests that another rate hike might occur in the second half of 2025.

Markets and Companies

US futures logged gains, with investors focusing on President Donald Trump’s speech in Davos, where he reiterated his push to lower interest rates and reduce oil prices. In Europe, markets were mostly higher, boosted by Burberry’s better-than-expected sales, while Ericsson shares fell on disappointing results. Meanwhile, Asian markets closed mixed following the Bank of Japan’s decision to raise its interest rate to 0.5%, the highest level since 2008.

In the commodities market, oil prices were set for weekly declines amidst expectations of increased US production and Trump’s calls for OPEC to lower prices. Conversely, gold prices were rebounding, nearing all-time highs.

In fixed income, US Treasury yields showed slight declines. The 10-year yield stood at 4.64%, while the 2-year yield was at 4.27%. Attention remains focused on the upcoming Fed meeting, with expectations of rates staying unchanged, according to FedWatch.

In Mexico, IPC futures rose to 51,868 points, while the exchange rate was at 20.22 pesos per dollar after setting at20.38 yesterday at market close. 

Kimberly-Clark reported fourth-quarter results, with sales increasing by 3% y/y to an annual total of $54.8 million pesos. EBITDA fell by 6% y/y in 4Q24 but grew 7% annually, reaching $14.9 billion pesos with a margin of 27.2%.

América Móvil announced modifications to its 20-F filing and the Annual Report submitted to the CNBV, incorporating the Mancera/EY evaluation of internal controls related to financial information (ICFR) as of December 31^st, 2023. Telmex will adjust its annual report for the same fiscal year if necessary.

Corporate News

• Boeing announced an expected $4 billion loss for 4Q24, with projected revenues of $15.2 billion, falling below analysts’ expectations. Issues include a $1.1 billion charge on the 777X and 767 programs due to a two-month strike that disrupted much of its commercial production.

• Danish pharmaceutical company Novo Nordisk reported positive early-stage trial results for Amycretin, a new injectable obesity drug administered weekly.