The Day at a Glance | May 7 2025

Citi’s survey once again cut its growth estimate for 2025.

• Later today, the Federal Reserve will announce its monetary policy decision, where we expect the federal funds rate to remain unchanged between 4.25% and 4.50%.

• U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet this weekend in Switzerland with China’s economic czar, He Lifeng, in talks that could mark the first step toward resolving a trade war that’s disrupting the global economy.

• On Wednesday, Chinese officials announced a stimulus package that includes interest rate cuts and a significant liquidity injection, as Beijing ramps up efforts to offset the economic damage caused by the trade war with the U.S.

• Germany’s industrial orders rose more than expected in March, marking their first increase of the year and potentially signaling a recovery in the weakened sector—provided trade tensions ease.

• Oil prices posted a second straight session of gains, boosted by investor optimism around the upcoming U.S.-China trade talks and signs of declining shale production in the U.S.

Economic Environment

Citi’s survey once again cut its 2025 growth forecast. The consensus now expects Mexico’s economy to grow just 0.1% (from 0.2% previously), while keeping the 2026 forecast at 1.5%. The survey shows increasing concern of a potential contraction this year, with 12 of 34 analysts now expecting a slight GDP decline, up from 8 in the previous survey. As for inflation, participants largely maintained their estimates at 3.80% for both 2025 and 2026. Meanwhile, consensus continues to expect the Central Bank of Mexico to cut the policy rate by 50 basis points on May 15^th. The forecast for the end of 2025 sees the funding rate at 7.75%, falling to 7.0% by the end of 2026. Regarding the exchange rate, expectations improved slightly, with the peso forecastedto close 2025 at 20.80 per dollar (previously 20.93), and 2026 at 21.23 per dollar (vs. 21.20 previously). Overall, the most notable takeaway from the survey is that analysts continue lowering their growth estimates for 2025, with forecasts ranging from 0.7% to -0.8%.

Markets and Companies

U.S. stock indexes are trading higher today as investors closely follow the latest developments in U.S. trade negotiations and await the Federal Reserve’s monetary policy announcement later today.

European markets are retreating, with investors focused on corporate earnings reports across the region. The Stoxx 600 was down 0.46% as of 2:00 p.m. in London, with the retail sector leading losses (-2.1%).

In Asia, markets closed mostly higher after China’s central bank and financial regulators announced broad plans to cut interest rates in order to boost economic growth amidst trade tensions.

In commodities, oil prices are rising today due to signs of lower production in the U.S. and a rebound in demand in Europe and China.

Gold, on the other hand, is retreating amidst renewed optimism around possible trade negotiations between the U.S. and China, which reduced demand for safe-haven assets.

In Mexico, the IPC is trading lower (-0.40%).

The exchange rate stands at 19.60 after closing at 19.67 yesterday.

At Alsea’s Annual General Meeting held on Wednesday, April 30^th, 2025, changes to the structure of its Board of Directors were approved, along with the previously announced CEO transition. Armando Torrado was appointed as the new Chairman of the Board, succeeding Alberto Torrado, and in July he will hand over the CEO position to Christian Gurría as part of a long-term succession plan.

Coca-Cola FEMSA successfully completed a US$500 million debt issuance maturing in 2035. Proceeds will be used for general corporate purposes, including working capital, investments, and debt repayment.

Grupo Aeroportuario del Pacífico reported 9.1% y/y growth in total passenger traffic in April. The increase was driven by domestic traffic (+12.3%), while international traffic rose 5.2%. Among its key operations, Tijuana Airport saw 8.2% and 14.1% growth in domestic and international traffic, respectively.

Grupo Aeroportuario del Centro Norte published its April passenger traffic report. Domestic passengers increased 17.5%, while international traffic rose 27.2%. This growth was driven by Monterrey Airport, which posted increases of 31.4% and 46.5% in domestic and international traffic, respectively.

Corporate News

• Disney shares rose more than 7% after beating estimates. It reported adjusted earnings of $1.45 per share on revenue of $23.62 billion (vs. $1.20 and $23.14 billion expected). It also raised its full-year earnings guidance to $5.75 per share (vs. $5.43 estimated) and announced a partnership with Miral to build a theme park and resort in Abu Dhabi.

• Super Micro Computer shares dropped more than 6% after the company missed expectations and issued weak guidance for the current quarter.