The Day at a Glance | January 27 2025

Top

*In China, January PMI´s logged slower activity. 

*Mexico’s trade balance closed 2024 with a deficit worth $8.21 billion.

*Delegates at the World Economic Forum in Davos praised Donald Trump’s deregulation plans and expressed enthusiasm for artificial intelligence, while others voiced concerns about inflation, debt, and fossil fuels.

*Business confidence in Germany unexpectedly improved in January, driven by a more positive assessment of the current economic situation. However, analysts noted that many companies remain pessimistic due to high uncertainty ahead of the elections.

*A clear majority of British companies appear ready to scale back wage increases for their staff in response to upcoming tax hikes, maintaining pessimism about the economic outlook, according to two surveys published on Monday.

*The Bank of Japan, after clearly signaling last week’s interest rate hike, may revert to its usual ambiguous guidance on monetary policy to maintain flexibility in its decisions.

*Oil prices declined on Monday after the US softened its initial threats of sanctions against Colombia, easing immediate concerns about oil supply disruptions. However, President Donald Trump’s show of force continues to keep markets on edge. 

Economic environment

In China, January PMI´s logged slower activity. The composite PMI stood at 50.1 in January 2025, down from 52.2 in December. The non-manufacturing PMI was 50.2 in January, retreating from 52.2 a month earlier. Meanwhile, the manufacturing PMI declined from 50.1 in December 2024 to 49.1 in January 2025, signaling the sector’s return to contraction. The market consensus had expected the manufacturing PMI to maintain the momentum seen at the end of the year. Overall, the world’s second-largest economy began the year with slower growth, keeping expectations alive for further stimulus from Chinese officials.

Mexico’s trade balance closed 2024 with a deficit worth $8.21 billion. From January to December 2024, the trade deficit (exports minus imports) reached $8.21 billion, compared to a $5.47 billion deficit reported a year earlier. During 2024, exports increased annually by 4.9%, driven by a 5.2% rise in non-oil exports and a -14.4% drop in oil exports. Within non-oil exports, agricultural goods increased by 7.1% y/y, mineral extractives by 18.6% y/y, and manufacturing by 4.8% y/y. Imports increased by 4.5% y/y in 2024; there was a decline in oil imports (-25.7% y/y) and an increase in non-oil imports (+7.3% y/y). Imports of consumer, intermediate, and capital goods posted +3.6% y/y, +4.4% y/y, and +6.4% y/y increases, respectively. In December 2024, a trade surplus worth $2.57 billion (+4.9% y/y) was recorded, compared to a $133 million deficit in November. Overall, the trade balance closed 2024 with a slightly larger deficit than in 2023, though it remains limited and does not disrupt external accounts.

Markets and companies

US futures fell amidst fears that a bubble is forming in artificial intelligence stocks due to the emergence of the Chinese startup DeepSeek, which reportedly developed a competitive AI model at a fraction of the usual cost.

In Europe, markets opened mostly lower as investors prepared for a busy week of earnings reports and the European Central Bank’s rate decision. The Stoxx 600 index opened down 0.7%, after posting a 1.2% weekly gain. Sector performance was mixed, with telecommunications rising 0.6%, while tech stocks plunged 4.3%.

Meanwhile, Asia-Pacific markets traded mostly lower on Monday as investors assessed China’s manufacturing data and industrial profits.

In commodities, oil prices fell by more than 1% after Donald Trump urged OPEC to cut prices following his announcement of measures to boost oil and gas production in his first week in office.

Metals and cryptocurrencies are trading lower. In Mexico, IPC futures are posting gains (+1.38%).

Over the weekend, the exchange rate fluctuated between a low of 20.18 and a high of 20.54. It currently stands at 20.49.

Corporate news

*Nvidia shares dropped more than 11% in premarket trading, heading for their worst day since March 2020. The sell-off followed the launch of a free open-source language model by the Chinese startup DeepSeek in late December, claiming it was developed in just two months at a cost of under $6 million.

*Shares of Vertiv Holdings, a data center services company, fell 16%. If the emergence of DeepSeek leads to lower-than-expected spending on AI infrastructure in the future, it could hurt Vertiv’s business outlook.

Facebook Comments