Jacobo Taurel

Global economic perspectives: What you need to know this week

Global summary: U.S. employment, cuts in Mexico and Europe, and trade tensions.

Week of February 3 to 7

This week’s global economic highlights:

• United States: President Donald Trump temporarily suspended tariffs on Mexico and Canada, while the labor market shows signs of slowing down with 143,000 jobs created in January and an unemployment rate of 4.0%.

• Europe: Inflation in the Eurozone slightly increased to 2.5% year-over-year in January, while the Bank of England cut its rate to 4.5% and adjusted its growth forecast.

• Asia: Japan is evaluating rate adjustments to reach its inflation target, and China is facing a tariff exchange with the U.S., impacting its energy and manufacturing sectors.

• Latin America: Mexico lowered its interest rate to 9.5%, supported by an improvement in inflation, and Argentina announced the end of its currency controls by 2026.

We invite you to follow our updates to stay informed about how these events may influence global economic and financial trends.

See the Full Weekly Summary

Key events in the coming weeks:

  • China: January inflation data to be released on 02/10
  • United States: January inflation data to be released on 02/12

Monitor

Posted in Weekly Summary

DeepSeek and Its Impact on the Artificial Intelligence Market

DeepSeek is revolutionizing AI with a more efficient and accessible model, generating significant interest. 

The recent announcement of DeepSeek has captured the attention of the technology and financial industries, signaling a potential disruption in the artificial intelligence and semiconductor sectors. This efficiency has fueled its rapid adoption, accelerating downloads of its application. Below, we highlight some key points. 

Key Highlights: 

• Unprecedented efficiency: DeepSeek trains models with only $5 million and 2,000 GPUs, compared to the $100 million and 100,000 GPUs required by current industry leaders. 

• Market impact: Following the announcement, NVIDIA and other leading players in the industry saw significant stock losses, reflecting a potential shift in market dynamics. 

• Challenges ahead: From national security concerns to regulatory risks and cybersecurity threats, DeepSeek’s path is not without obstacles. 

While it is still early to assess its long-term impact, the evolution of DeepSeek raises key questions about the future of hardware and semiconductors in the AI industry.  

We remain attentive to exploring the implications of this breakthrough together. 

DeepSeek vs. ChatGPT comparison 

Source: Datacamp.com 

Posted in Weekly Comment

Economic perspectives: Key decisions and their global impacts. 

The impact of central bank decisions and global economic performance in early 2025. 

Week of January 27 to 31 

So far this year, global economies have shown mixed signals: 

  • United States: The Fed maintained the benchmark rate at 4.25%–4.5%, while Q4 2024 GDP grew 2.3%, marking a slowdown compared to previous quarters. 
     
  • Europe: The ECB cut the benchmark rate to 2.75% amid economic stagnation in the Eurozone. 
     
  • China: Manufacturing and services activity unexpectedly contracted, reinforcing expectations for new stimulus measures. 
     
  • Mexico: Exports grew 4.1% year-over-year in 2024, while Q4 2024 GDP declined by 0.6%, marking its first contraction since 2021. 

We invite you to analyze this data and consider its implications for your financial and strategic decisions. If you’d like more information or a detailed analysis, please feel free to contact us. 

See the Full Weekly Summary

Important events in the next weeks 

  • In the United States, the manufacturing ISM will be released on 02/03. 
  •  In the United States, employment data will be released on 02/07. 

Monitor 

Posted in Weekly Summary

Monetary Policy: The Fed Pauses, but the Market Expects Cuts 

The Federal Reserve holds its benchmark rate steady, but the market anticipates adjustments in 2025. 

As expected, the Federal Reserve (Fed) maintained its benchmark interest rate within the 4.25%-4.5% range. This decision marks a pause following three consecutive cuts since September 2024, totaling a one-percentage-point reduction. 

The Fed’s statement highlighted that economic activity continues to grow at a solid pace, while unemployment remains low and the labor market strong. However, inflation remains somewhat elevated, and the Fed omitted previous references to progress toward its 2% target. 

Looking ahead, markets are pricing in a 3.9% rate by the end of 2025, with a 61% probability of at least two quarter-point cuts this year. The first cut could come as soon as the June 18 meeting. 

We will continue monitoring the Fed’s decisions and their impact on the markets. If you’d like more information on how this policy could affect your financial strategies, feel free to reach out to us. 

Expectations for the Fed Funds Rate

Source: JP Morgan 

Posted in Weekly Comment

Global outlook: Economy and politics under new leadership.

Global Analysis: Politics, economy, and key trends in international markets.

Week of January 21 to 24 

The week was marked by the inauguration of Donald Trump as the 47th President of the United States. He signed executive orders on immigration, energy, and security and announced the possibility of implementing a 25% tariff on products from Canada and Mexico, set to take effect on February 1. 

On the economic front, there was a slight increase in unemployment insurance claims. Meanwhile, the Q4 2024 earnings season had a strong start, with S&P 500 companies reporting an initial 5% growth in sales and a 17% increase in profits.  

In other global markets: 

• Europe: The ECB is expected to announce a rate cut next week, while consumer sentiment shows improvement. 

• Japan: The Bank of Japan raised its benchmark rate to 0.5%, aligning with expectations. 

• China: The People’s Bank of China kept interest rates unchanged for the third consecutive month. 

• Mexico: Inflation fell to its lowest level since 2021, and the IMF revised its 2024 growth forecast upward. 

These developments highlight the importance of staying vigilant regarding key movements in global politics and economics. 

See the Full Weekly Summary

Important events in the coming weeks 

  • In the United States, the Fed’s monetary policy announcement will be on 01/29 
  • In the United States, Q4 2024 GDP will be released on 01/30 

Monitor 

Posted in Weekly Summary

China: Solid growth, but with challenges in sight. 

China exceeds growth expectations in 2024 but faces significant challenges.

In 2024, China’s economy achieved a 5.0% growth rate, meeting the official target. However, this performance—its weakest since 1990, excluding the pandemic years—reflects an economy heavily reliant on fiscal and monetary stimulus. Key highlights include: 

  • Inflation: Increased by only 0.2%, signaling weak domestic demand. 
  • Industrial production: Grew 5.8%, led by high-tech sectors (+8.9%). 
  • Real estate: Declined 10.6%, highlighting weakness in the sector. 
  • Demographics: Population decreased 1.39 million, exacerbating the aging challenge. 
  • International trade: Exports grew 7.1%, and imports 2.3%. 
  • Unemployment: Urban unemployment rate remained stable at 5.1%. 

Despite these figures, China’s economy continues to face significant pressures, including weak domestic consumption, a persistent real estate crisis, and ongoing trade tensions with the U.S. Analysts anticipate that the government will announce new stimulus measures, although fiscal and monetary policy options are increasingly constrained. 

We will closely monitor the growth target China sets in the near future and assess the impact of its measures on the global economy. 

Annual and quarterly GDP evolution 

  • oya: Refers to year-over-year variation. 
  • Q/Q: Refers to quarter-over-quarter variation. 

Source: JP Morgan 

Posted in Weekly Comment

Global economic outlook: Key data from the United States, Europe, and more. 

Financial results and inflation key events so far this year. 

January 13th-17th Week 

The global economic outlook continues to provide crucial insights for understanding market trends. Here’s a summary of the most relevant data: 

  • United States: The Q4 2024 earnings season began with strong reports from JP Morgan, Citi, and other institutions. Meanwhile, inflation closed at 2.9% annually in December, in line with expectations, and retail sales advanced by 0.4%. 
  • Europe: The ECB may continue easing its monetary policy after four rate cuts last year. However, Germany’s economy has experienced two consecutive years of contraction.  
  • Japan and China: Japan is debating potential interest rate hikes, while China showed a recovery in exports with, a 10.7% annual growth. 
  • Latin America: In Mexico, the Plan México was introduced to attract strategic investments, while Argentina ended 2024 with a significant slowdown in inflation, dropping to 117.8% annually. 
See the full Weekly Summary

Important Upcoming Events: 

  • In the United States, Martin Luther King Jr. Day will be commemorated on 01/20. 
  • In the United States, consumer confidence indicators will be released on 01/24. 

Monitor 

Posted in Weekly Summary

December Brings Encouraging Signs in Inflation 

Core inflation shows signs of deceleration, while shelter costs register their lowest growth rate since 2022. 

The Consumer Price Index (CPI) rose by 0.4% in December, aligning with market expectations. Over the past 12 months, headline inflation increased by 2.9%. The Core CPI, which excludes food and energy, showed signs of deceleration with a 0.2% monthly rise, the lowest in four months. On an annual basis, it dropped to 3.2%.  

Key components include: 

  1. Energy: Contributed 2.6% to the monthly increase, driven by a 4.4% rise in gasoline prices. 
  1. Food: Prices rose by 0.3% in December, with annual variations of 1.8% for food at home and 3.6% for food away from home. 
  1. Shelter: Increased by 0.3%, marking its smallest annual variation (4.6%) since January 2022. 

These figures provide some relief for the Fed, reflecting a slowdown in core prices, which could pave the way for further rate cuts in 2025. For now, the rate is expected to remain between 4.25% and 4.50% at the upcoming January meeting. 
 

Annual Variation (%) of the Consumer Price Index (CPI): General and Core CPI 

Source: US Bureau of Labor Statistics 

Posted in Weekly Comment

Economic Report: Global Insights for 2025

Key indicators mark the beginning of 2025: inflation, employment, and global challenges. 

Week of January 6 to10 

The beginning of the year brings key data that impacts global markets and investment decisions. Here are some of the main highlights: 

  • United States: Strong job growth with 256,000 new positions in December and a drop in the unemployment rate to 4.1%. However, persistent inflation has pushed 10-year treasury yields to 4.74%. 
  • Europe: Inflation in the Eurozone rose to 2.4% annually in December, with Germany reporting figures above the ECB’s target. Economic activity continues to contract, reinforcing challenges in the region. 
  • Asia: In China, government measures to boost household consumption include subsidies for appliances and digital goods. In Japan, growth in services has been driven by local demand. 
  • Latin America: In Mexico, annual inflation of December hit its lowest level since 2021 (4.21%), opening the door for potential rate cuts. In Argentina, the country risk fell to its lowest level since 2018, reflecting increased confidence in its assets. 
See the full Weekly Summary

Key events in the coming weeks 

  • In China, international trade figures will be released on 01/13. 
  • In the U.S, inflation and retail sales data will be released on 01/15–16. 

Monitor 

Posted in Weekly Summary

Artificial Intelligence: Opportunities and challenges on the horizon 

The rise of AI presents transformative opportunities and challenges that investors need to consider.

Artificial intelligence (AI) continues to be a central topic in the global tech landscape. Major companies such as Amazon, Alphabet, Meta, and Microsoft have announced investments of up to US$500 billion over the next three years, a move reminiscent of the internet boom of the 90’s. 

While short-term expectations tend to be optimistic, analysts agree that the true potential of AI will unfold over the long term. With applications ranging from semiconductors and cloud services to language models and end-user tools, AI’s impact could be described as “immeasurable.” 

However, this technological revolution is not without its challenges. Increasing demand for energy and materials like copper could create bottlenecks, while the risk of overcapacity and signs of false demand could impact return-on-investment projections. 

AI is expected to evolve in two phases: an initial phase driven by consumer adoption, and a longer phase focused on enterprise integration. This highlights the importance of distinguishing between current enthusiasm and sustainable long-term opportunities. 

Technological development tends to be overestimated in the short term, while its long-term potential is often underestimated. 

Source: Capital Group  

Posted in Weekly Comment
Ponte en contacto con nosotros

Receive the best financial market news

Cookie Policy

We use our own and third party cookies to improve our services and show you advertising related to your preferences, by analyzing your browsing habits. By continuing, you confirm that you have read and accept this policy.