The Day at a Glance | March 7 2025

The Top

• In the US, February´s employment figures were close to consensus expectations.

• In Mexico, headline inflation stood at 3.77% in February.

• On Thursday, US President Donald Trump suspended the 25% tariffs he had imposed earlier this week on most Canadian and Mexican products, in the latest shift of a volatile trade policy that has rattled markets and fueled concerns over inflation and growth.

• China’s imports unexpectedly contracted in the January-February period (-8.4% vs. 1.0%e), while exports lost momentum (2.3% vs. 10.7% prev.), amidst mounting US tariff pressure.

• The Eurozone´s economy grew 1.2% y/y in 4Q24, exceeding initial estimates of 0.9% y/y and accelerating from the revised 1.0% y/y growth in the previous quarter.

• Inflationary pressures from rising wages and prolonged food price increases could lead Bank of Japan board members to discuss a rate hike as early as May.

• Oil prices extended gains on Friday, rising more than $1 per barrel, after Russian Deputy Prime Minister Alexander Novak stated that OPEC+ could reverse its production increase after April if necessary.

Economic Environment

In the US, February´s employment figures were close to consensus expectations. The Bureau of Labor Statistics (BLS) reported that nonfarm payrolls increased by 151,000 jobs in February 2025, slightly below the consensus estimate of 160,000. Additionally, December and January´s job growth was revised downward by a total of 2,000 jobs over the two months. Meanwhile, the unemployment rate stood at 4.1% in February, exceeding both market consensus expectations and the previous month’s 4.0% reading. Wage growth in February was 4.0% y/y, up from 3.9% y/y in January 2025. Overall, February´s employment figures remained close to market expectations, with no job losses observed in sectors linked to international trade. The only job cuts occurred in the federal government and the food and beverage sector, the latter due to the start of a strike. This scenario supports expectations that the Fed will pause its rate-cutting cycle.

In Mexico, headline inflation stood at 3.77% in February. INEGI reported that the National Consumer Price Index increased by 0.28% m/m, slightly above the market consensus of 0.27% but below our estimate of 0.29% m/m. On an annual basis, headline inflation reached 3.77% (prev. 3.59%). Meanwhile, core inflation, which excludes the most volatile items such as energy, agricultural products, and regulated prices, rose by 0.48% in February, exceeding both market consensus and our forecast of 0.45%. On an annual basis, core inflation stood at 3.65% (prev. 3.66%). By components, goods inflation reached 2.75% y/y (prev. 2.74%), while services inflation stood at 4.64% y/y (prev. 4.69%). In contrast, non-core inflation, which includes the most volatile components, reached 4.08% y/y (prev. 3.34%) in February 2025. February’s inflation figures were very close to market expectations, reinforcing the outlook for further benchmark rate cuts.

Markets and Companies

Futures for the main US indices were trading higher following February´s employment report, which showed the creation of 151,000 jobs, below the 170,000 expected, while the unemployment rate rose to 4.1%. In Europe, markets were in negative territory, weighed down by trade uncertainty and the European Central Bank’s recent rate cut decision. Meanwhile, in Asia, markets closed lower.

In the commodities market, oil prices were rising. Volatility persists following OPEC+’s decision to increase production and US efforts to restrict Iranian exports. Meanwhile, gold was trading at $2,923 per ounce, continuing its weekly gains, driven by economic uncertainty.

In fixed income, the yield on the 10-year US Treasury note fell to 4.24%, while the 2-year yield stood at 3.91%, as investors reassessed the Fed’s stance following the jobs report.

Regarding the local stock market, IPC futures were up at 52,947 points. Meanwhile, the exchange rate logged slight appreciation, standing at 20.26 pesos per dollar, compared to 20.31 in the previous session.

Grupo Aeroportuario del Centro Norte released its monthly passenger traffic report, showing a 5.2% y/y increase, with domestic traffic up 4.4% and international traffic rising 9.7%. The Monterrey airport stood out with solid 12.2% growth.

Corporate News

• Hewlett Packard issued a weak outlook for fiscal 2025, though it slightly exceeded revenue expectations with $7.85 billion. The company highlighted pricing pressures and discounts on traditional servers. Additionally, it announced a cost-cutting plan, including layoffs of approximately 2,500 employees.

• Costco reported revenue of $63.72 billion for the quarter, surpassing estimates. The company noted that new tariffs pose a challenge to its costs but assured that it will work with suppliers to mitigate the impact on consumers.

• Broadcom beat expectations with $14.92 billion in revenue, driven by a 77% increase in its artificial intelligence business. The company projected continued growth in AI chip revenue and raised its guidance for the second quarter.