The Day at a Glance | March 28 2025

The Top

• In the U.S., strong consumption data was recorded, and core PCE inflation picked up in February.

• Canadian Prime Minister Mark Carney announced that the traditional relationship with the United States has ended, in response to the 25% tariffs imposed by Donald Trump on automobile imports.

• The Trump administration proposed a deal that would grant the U.S. preferential rights over infrastructure and natural resource investments in Ukraine, sparking tensions with the European block.

• Marcelo Ebrard, Secretary of Economy, will seek conditions in Washington to protect Mexican jobs and economic activity, following the U.S. imposition of 25% tariffs on imported vehicles.

• Bank of Japan policymakers were divided this month on when interest rates should be raised again, according to a summary of views from their latest meeting. While some focused on domestic inflationary pressures, others expressed concern over uncertainty surrounding U.S. tariff policy.

• On Friday, oil prices were on track for their third consecutive weekly gain, driven by increased U.S. pressure on Venezuela and Iran. However, concerns that Washington’s tariff war might curb demand limited gains. 

Economic Environment

In the U.S., strong consumption data was recorded, and core PCE inflation picked up in February. Disposable personal income rose 0.9% (vs. 0.7% prev.), while nominal personal consumption spending increased 0.4% (vs. -0.3% prev.). Meanwhile, the annual personal consumption expenditure (PCE) inflation rate—used by the Federal Reserve as its target inflation measure—stood at 2.5% in February, in line with both market expectations and the previous month. Core PCE inflation, which excludes energy and food, came in at 2.8% in February, above both the market consensus forecast and January’s 2.7%. On a monthly basis, headline PCE inflation rose 0.3%, while the core index increased 0.4%. Looking ahead, the Cleveland Fed’s Nowcasting model estimates that March´s headline CPI inflation will set at 2.5% and headline PCE inflation at 2.1%. Overall, PCE inflation data was mixed: on one hand, the rebound in private consumption suggests household spending remains strong and that January’s drop may have been due to external factors. On the other hand, the increase in core inflation exceeded expectations and appears to be driven by an unusual rise in goods inflation.

Markets and Companies

U.S. equity markets were trading slightly lower this morning after the PCE index came in above expectations for February, at 2.8% y/y. Concerns over the auto tariffs announced by President Trump continue to drive market volatility. In Europe, markets were also down following the release of inflation data in France and Spain, both of which came in lower. Meanwhile, Asian markets closed in negative territory.

In commodities, oil prices retreated after a seven-day rally. Uncertainty over a potential trade war, lower-than-expected U.S. inventory data, and new sanctions on Venezuela and Iran continue to impact crude prices. Gold, on the other hand, hit a new record high, trading around $3,079 per ounce, reinforcing its role as a safe-haven asset.

In fixed income, Treasury yields fell following the inflation report. The 10-year yield dropped to 4.29%, while the 2-year yield stood at 3.96%.

The IPC was trading lower at 53,297 points, while the exchange rate stood at 20.35 pesos per dollar, compared to 20.30 in the previous session.

Yesterday, Alfa announced the distribution of shares of Controladora Alpek (CTALPEK). Alfa shareholders will receive one share of Controladora Alpek for each ALFA share they hold at the close of trading on April 4^th, 2025. The ex-rights date, which is when CTALPEK shares will begin trading, is next Monday, April 7^th.

With this announcement, Alfa completes the spin-off of Alpek, meaning Alfa’s shares will now represent the Sigma business. The value-unlocking process undertaken by Alfa began years ago with the separation of Axtel, followed by Nemak, and now concludes with Alpek. What was once a conglomerate is now divided into four independently operating businesses, allowing for a clearer recognition of each company’s value.

Corporate News

• Lululemon issued a weak outlook for 2025, signaling a challenging macro environment and reduced store traffic in the U.S., despite exceeding revenue and earnings expectations in Q4. The company expects margin pressure due to higher fixed costs, FX effects, and tariffs.

• U.S. Steel reported that Nippon Steel is willing to significantly increase its investment in U.S. plants in an effort to secure regulatory approval for their merger. The move aims to ease concerns from the U.S. government and labor unions regarding the transaction.

• CoreWeave made its market debut with a lower-than-expected valuation, though its shares drew interest due to strong revenue growth driven by demand for artificial intelligence services.