The Day at a Glance | January 8 2025

The Top

• The Citi Survey estimates that the next move by the Central Bank of Mexico will be a 25-basis-point cut in February.

• The ADP private employment survey reported the creation of 122,000 jobs in December, the lowest figure in the past four months.

• Later today, the Federal Open Market Committee minutes will be released, providing key insights into the Committee’s monetary stance for the coming months.

• On Wednesday, President-elect Donald Trump and his Republican colleagues in Congress will begin to outline a path for implementing further tax cuts, border controls, and measures to boost fossil fuel production.

• In the week ending January 4^th, 2025, initial unemployment insurance claims in the US reached 201,000 (218,000 expected), decreasing from the previous week’s 211,000.

• China expanded the list of household appliances included in its product exchange program and announced additional subsidies for digital goods this year as part of its efforts to revitalize consumption.

• Oil prices trimmed earlier gains on Wednesday due to the strengthening dollar but were held by a reduction in supplies from Russia and other OPEC members, as well as a decline in crude inventories in the US.

Economic Environment

The Citi Survey estimates that the next move by the Central Bank of Mexico will be a 25-basis-point cut in February. The consensus from the Citi Survey forecastsheadline inflation will close 2024 at 4.27%, while core inflation is expected to set at 3.64%. For 2025, the survey anticipates headline and core inflation to reach 3.91% and 3.71%, respectively. By the end of 2026, headline inflation is expected to stand at 3.80%, with core inflation at 3.61%.Regarding the funding rate, the survey consensus predicts a 25-basis-point cut in February and forecasts an 8.50% rate by the end of 2025. Looking further ahead, the consensus anticipates a continued decline in the rate, reaching 7.50% by the end of 2026. The exchange rate is expected to close 2025 at 20.95 pesos per dollar and 2026 at 21.48 pesos per dollar. Real GDP growth is forecasted at 1.6% for 2024, 1.0% for 2025, and 1.8% for 2026.

Markets and Companies

US futures are trending higher, following a sharp drop in big tech stocks and renewed concerns about the direction of rate cuts, which triggered a broad sell-off on Wall Street.

European markets are declining after regional economic confidence weakened in December, according to preliminary data. The Stoxx 600 traded up 0.5% for most of Wednesday morning but retreated after midday, with most sectors in negative territory, except for healthcare and financial services.

Meanwhile, Asian markets logged mixed results on Wednesday, following Wall Street declines driven by rising Treasury yields and a sell-off in major US tech stocks.

In commodities, oil prices rose due to reduced supply from Russia and OPEC members, while US crude inventories fell last week.

Metals are showing mixed figures, while cryptocurrenciesare down. In Mexico, IPC futures are up 1.97%.

The exchange rate stands at 20.44 pesos per dollar after closing at 20.31 yesterday.

Corporate News

• SolarEdge Technologies shares dropped 6% as Citi downgraded the company from neutral to sell, citing persistently high operating expenses despite its restructuring announcement.

• Shell shares fell 3% after the company lowered its liquefied natural gas production outlook for the fourth quarter.