The Day at a Glance | March 24 2025

The Top

• In Mexico, inflation for the first half of March surprised to the downside.
• Mexico´s economy contracted in January. 
• The Monthly Timely Indicator of Manufacturing Activity estimates that the sector’s activity could have decline by -2.4% y/y in February.
• U.S. PMI´s showed that business activity rebounded in March (53.5 vs. 51.6 prev.), but growing concerns over import tariffs and government spending cuts continued to weigh on confidence and outlook for the rest of the year.
• Eurozone PMI´s indicated that economic activity continues to rise as manufacturing output returns to growth territory. The composite PMI stood at 50.4 (50.2 prev.), reaching its highest level in the past seven months.
• U.S. and Russian officials held talks in Saudi Arabia on Monday, aiming to advance towards a broad ceasefire in Ukraine, while Washington first seeks a separate maritime ceasefire agreement in the Black Sea before securing a broader deal.
• Oil prices rose in a volatile session on Monday as investors assessed the impact of new U.S. sanctions on Iranian exports against negotiations to end the war in Ukraine, which could increase the supply of Russian crude in global markets.

Economic Environment

In Mexico, inflation for the first half of March surprised to the downside. INEGI reported that the National Consumer Price Index for the first half of March recorded a biweekly 0.14% figure, below our 0.18% estimate and the market consensus forecast of 0.17%. On an annual basis, headline inflation for the first half of March stood at 3.67%. Meanwhile, core inflation, which excludes the most volatile items such as energy, agricultural products, and government-regulated prices, increased by 0.24% q/q in the first half of March, in line with our estimate (0.23%). On an annual basis, core inflation reached 3.56%. By component, goods rose 2.92% y/y and services increased 4.25% y/y. Overall, inflation in the first half of March performed better than market expectations, largely due to the 24-peso-per-liter cap on low-octane gasoline, which led to a decline in the energy component. Nevertheless, inflation remains close to the Central Bank of Mexico’s 3.0% target, reinforcing expectations of a 50-basis-point cut in the policy rate by the end of this month.

Mexico´s economy contracted in January. In Mexico, the Global Indicator of Economic Activity (IGAE, for its acronym in Spanish), a proxy for monthly GDP, declined by -0.2% m/m in January 2025, based on seasonally adjusted figures. Breaking down the data, the primary sector expanded 3.1% m/m, the secondary sector contracted -0.4% m/m, and the tertiary sector stagnated. On an annual basis, using original figures, the IGAE decreased by -0.1% in January 2025. By sector, primary activities rebounded 14.8% y/y, secondary activities fell -2.9% y/y, and tertiary activities grew 0.8% y/y. Economic activity data was weak, as the IOAE had forecasted an expansion in January. In this regard, further declines in the coming months cannot be ruled out, particularly given the heightened uncertainty in the current environment due to trade threats from the U.S. administration.

Markets and Companies

The main U.S. stock indices are up on Monday following reports that President Donald Trump planned to delay some of the tariffs initially scheduled for April 2^nd, raising hopes that the U.S. will not lead the world into a trade war.

In Europe, markets are mixed after the news that Trump hinted at some “flexibility” regarding tariffs. The Stoxx 600 was up 0.01% at 11:55 a.m. London time.

In Asia, markets mostly traded higher.

Regarding commodities, oil prices remain stable as investors assess the impact of ceasefire negotiations to end the war between Russia and Ukraine, which could increase the supply of Russian crude oil in global markets.

Gold prices remain stable, supported by a weak dollar and uncertainty surrounding Trump’s tariff plans.

In Mexico, the IPC is up 0.12%. 

Over the weekend, the exchange rate fluctuated between a low of 20.12 and a high of 20.24. It currently stands at 20.11. 

Corporate News

• AZEK shares soared 23% after James Hardie Industries, a cement manufacturer, announced the acquisition of the company in a cash-and-stock deal worth approximately $9 billion. However, James Hardie shares fell 11% following the news.
• Pinterest gained nearly 5% after Guggenheim upgraded its rating from neutral to buy. Analyst Michael Morris noted that the recent decline in the stock price has created an attractive entry point for investors.
• Tesla rose nearly 4% at the start of the week after having accumulated nine consecutive weeks of losses through last Friday.