The Day at a Glance | January 9 2025

The Top

• In Mexico, headline inflation closed set at 4.21%at the end of 2024.

• In China, consumer prices hit a nine-month low in December, while producer price deflation persists.

• In the US, markets will be closed in memory of former President James E. Carter.

• The Federal Open Market Committee´s meeting minutes indicated that upside risks to inflation are increasing, driven primarily by higher-than-expected readings and uncertainty surrounding potential changes in trade and immigration policies. We expect a pause in the rate cuttingcycle.

• Later today, the Central Bank of Mexico´s meeting minutes will be released. We expect to find signsregarding the pace of rate cuts the central bank plans to implement during the first months of 2025.

• The Bank of Japan may raise its benchmark interest rate as early as the end of the month, as wage increases become widespread due to a labor shortage.

• Oil prices posted a slight increase on Thursday, driven by expectations of strong winter fuel demand. This occurred despite high fuel inventories in the US and ongoing macroeconomic concerns weighing on the energy market.

Economic Environment

In Mexico, headline inflation closed 2024 at 4.21%.INEGI reported that the National Consumer Price Index for December rose by 0.38%. On an annual basis, headline inflation set at 4.21% at the end of 2024, below the consensus estimate of 4.27%. Meanwhile, core inflation, which excludes the most volatile items such as energy, agricultural products, and government-regulated prices, rose 0.51% in the last month of the year, in line with market expectations. Annually, core inflation closed 2024 at 3.65%. By component, goods ended the year with annual inflation of 2.47%, and services rose by 4.94%. As for the more volatile categories, or non-core inflation, it stood at 5.95% y/y at the end of 2024. Inflation figures for last year showed a significant drop in core inflation—medium- to long-term inflation—falling from 5.09% to 3.65%. This suggests that as various supply shocks affecting the more volatile components (non-core inflation) dissipate, headline inflation could begin to decline toward this level, assuming all else remains constant.

In China, consumer prices hit a nine-month low in December, while producer price deflation persists. Annual consumer inflation in China rose by 0.1% y/y in December 2024, meeting market expectations and below the 0.2% y/y recorded in the previous month. On a monthly basis, December consumer inflation was flat, following a -0.6% drop in November. Regarding producer inflation, December’s annual reading came in at -2.3%, a milder decline compared to November’s -2.5%. Overall, China’s consumer inflation reached a nine-month low in December, while producer price deflation continued, even as the economy benefited from recent economic stimulus packages.

Markets and Companies

The US stock market will remain closed for a national day of mourning following the death of former President Jimmy Carter. Yesterday, the main stock indices closed the session higher. Investors digested the Federal Reserve’s latest monetary policy meeting minutes; members took on a more cautious tone regarding the pace of interest rate cuts for 2025.

On the economic front, the market remains focused on tomorrow’s release of US employment figures for December.

In Europe, stock markets are logging a positive trend, while declines were recorded in Asia.

US Treasury yields have risen recently due to expectations of the inflationary effects of Donald Trump’s policies. The 2-year bond is trading at 4.26%, and the 10-year bond at 4.65%.

In Mexico, futures for the IPC index are trading higher.

Regarding the exchange rate, the Mexican peso is trading at 20.47 pesos per US dollar, after closing at 20.37 yesterday.

Grupo Aeroportuario del Centro Norte reported a 9.1% y/y increase in total passenger traffic in December. The report highlights a 26.1% y/y rise in international traffic, while domestic traffic increased by 6.2% y/y. On an annual basis, total traffic in 2024 fell by 1.2%, driven by a 3.5% y/y decline in domestic traffic, despite a 15% y/y increase in international traffic.

In its passenger traffic report, Volaris recorded a 4.5% y/y drop in ASM´s in December, resulting in a 12.6% y/y decrease in 2024, compared to the 13% decline anticipated in its 3Q24 guidance. Passenger traffic and RPM´s decreased by 1.9% and 2.1%, respectively, with the domestic segment leading the declines.

Corporate News

• Yesterday, eBay shares surged after Meta announced it would allow some of the company’s ads to appear on Facebook Marketplace.

• According to media reports, Microsoft may implement additional layoffs, though they would account for less than 1% of the total workforce.

Facebook Comments