The Day at a Glance | March 3 2025

The Top

• Annual consumer inflation slightly declined in February.

• On Sunday, British Prime Minister Keir Starmerstated that European leaders agreed to draft a peace plan for Ukraine, aimed at presenting it to the U.S., a key step for Washington to offer security promises that Kiev considers essential to deter Russia.

• China is targeting U.S. agricultural exports while preparing countermeasures against the new tariffs on imports imposed by Washington, thus intensifying the growing trade war between the world’s two largest economies.

• Manufacturing activity in China expanded at its fastest pace in three months in February, driven by an increase in new orders and higher purchase volumes, according to an official survey published on Saturday.

• Later, February´s ISM manufacturing data will be released; the market consensus estimates it will setat 50.7 points, down from 50.9 in January.

• Oil prices remained virtually stable on Monday after recording their first monthly decline since November, while investors await the outcome of efforts to end the Russia-Ukraine war and assess the impact of U.S. tariffs.

Economic Environment

Annual consumer inflation slightly declined in February. Annual inflation in the European block stood at 2.4% in February, above the market consensus expectation of 2.3% and below January’s 2.5%. This reading breaks four consecutive months of rising annual inflation. By components, and for February 2025, food, alcoholic beverages, and tobacco inflation was 2.7% YoY (previously 2.3%), services set at 3.7% YoY (previously 3.9%), non-energy industrial goods at 0.6% YoY (previously 0.5%), and energy at 0.2% YoY (previously 1.9%). Additionally, annual inflation in the European block´s main economies remained at the same level between January and February; for example, Germany stayed at 2.8%, Spain at 2.9%, and Italy at 1.7%. Meanwhile, France’s inflation dropped from 1.8% to 0.9%. Overall, the Eurozone´s inflation decreased mainly due to a drop in energy inflation but also in services, strengthening the scenario for a 25 basis point cut in the European Central Bank’s deposit rate this week.

Markets and Companies

U.S. futures rise after a weak February and ahead of Trump’s tariff deadline; tariffs of up to 25% on imports from Mexico and Canada are set to take effect on Tuesday.

In Europe, markets are up, driven by a rebound in defense stocks following talks on increased military spending. The Stoxx 600 was up 0.59%, while the aerospace and defense index rose nearly 6%, on track for its best session in five years.

Asia-Pacific markets mostly rose on Monday as investors awaited more clarity on Donald Trump’s plans to impose tariffs on major trading partners this week.

In commodities, oil prices remain stable, balancing optimism from manufacturing data in China with uncertainty over Ukraine and tariffs.

Gold rose, driven by dollar weakness amid uncertainty over U.S. tariff policies and a lack of progress on a peace deal in Ukraine.

In Mexico, IPC futures are trading higher (0.47%).

Over the weekend, the exchange rate fluctuated between a low of 20.43 and a high of 20.61. It´s currently at 20.46.

Corporate News

• Tesla shares rose nearly 3% after Morgan Stanley named it as their new top pick in the U.S. auto sector, with expectations of a 50% rebound in its stock.

• Allegro MicroSystems shares gained around 15% after reports that ON Semiconductor is interested in acquiring it, while other potential buyers are also showing interest in expanding their automotive capabilities.