Gross fixed investment in Mexico increased 0.5% month-over-month in December 2025 with seasonally adjusted figures, although it recorded a 1.6% annual decline. By components, spending on construction grew 0.9% month-over-month, while machinery and equipment fell 0.3%. On an annual basis, investment in construction rose 4.1%, but machinery and equipment declined 7.9%.

Our take

The monthly increase in investment in December suggests some stabilization toward the end of 2025, following the growth observed in November. However, the annual decline indicates that investment remains weak in trend terms. The expansion in construction versus the contraction in machinery and equipment suggests that the recovery remains gradual and uneven, with stronger momentum in construction projects while investment in capital goods remains lagging.

Volatility in financial markets continues as the conflict between the United States and Iran enters its sixth day without signs of de-escalation, sustaining fears of disruptions in crude supply. Meanwhile, the Islamic Republic stated that its retaliation against U.S. attacks will intensify. With maritime traffic halted, Gulf-producing countries are accumulating oil in storage facilities that, in the case of Iraq and Kuwait, are approaching capacity. Yesterday, U.S. Defense Secretary Pete Hegseth said at a press conference that the war could last longer than expected, potentially up to eight weeks.

Our take

These swings in markets will likely remain the norm over the coming days, at least until the situation in the Middle East stabilizes and investors can gain a clearer view of the scenario they will face.

The U.S. services sector accelerated in February and continued expanding. According to the Institute for Supply Management’s PMI index, it reached 56.1 points, up from 53.8 the previous month. The figure exceeded consensus expectations of 53.5 and marked its highest level since July 2022.

Our take

Regarding tariffs, although several comments referenced uncertainty surrounding the U.S. Supreme Court’s decision, there was no alarm regarding supply chain performance, suggesting that service-sector companies have developed capabilities to routinely manage changes in tariff policies.

U.S. Treasury Secretary Scott Bessent said Wednesday that an increase in President Donald Trump’s temporary global tariff could likely be implemented this week, rising from 10% to 15%.

Our take

Trump announced the new tariff at the end of February after the Supreme Court invalidated his previous global tariffs under a national emergency law. Initially, tariffs were imposed for the next 150 days under Section 122 of the Trade Act of 1974, at a lower rate of 10%. The increase could create confusion in global financial markets.

The Federal Reserve’s Beige Book showed that U.S. economic activity increased at a pace between slight and moderate, representing an improvement compared with the previous three reporting cycles, when most districts reported little change. Meanwhile, prices rose at a moderate pace across most districts, with only two reporting slight increases, although cost pressures related to tariffs were mentioned frequently.

Our take

The Beige Book confirms that the U.S. economy had a solid 2025, with GDP growth above potential around 2.2%. This has complicated the Federal Reserve’s outlook regarding the next steps for interest rates, because the slowdown in the labor market is not particularly significant and prices remain above target.

China has set its GDP growth target for 2026 in a range between 4.5% and 5%, the lowest level since the early 1990s, amid persistent deflationary pressures and trade tensions with the United States. The target, included in the government work report presented during the annual meeting of the National People’s Congress, represents a reduction compared with the “around 5%” objective that Beijing maintained over the previous three years.

Our take

We consider the new growth target quite realistic, as it recognizes the numerous challenges facing the country’s economy, including a rapidly changing international trade environment and structural issues that continue to weigh on consumption and investment.

According to data from Eurostat, retail sales in the Eurozone declined 0.1% in January compared with December, in seasonally adjusted terms. The analyst consensus had projected a 0.6% increase for the month.

Our take

Uncertainty continues to keep consumers cautious, so the report somewhat challenges expectations of a consumption-driven recovery and offsets other slightly positive news from the 20-country monetary bloc. The positive aspect of the report is that December’s figure was revised upward by six tenths.

Markets and Stocks

In commodities markets, oil prices have extended their gains, trading around 76.58 dollars, driven by the escalation of the conflict in the Middle East and reports of China suspending fuel exports. Precious metals such as gold continue to be sought as safe-haven assets.

Corporate

Broadcom stated that it expects sales of chips linked to artificial intelligence to surpass 100 billion dollars by 2027. The company projects revenue of 10.7 billion dollars in AI chips for the current quarter after reporting 20 billion dollars in 2025, and anticipates second fiscal quarter sales of around 22 billion dollars, above market expectations. It also announced a share repurchase program of up to 10 billion dollars.

Anthropic resumed talks with the U.S. Department of Defense to define the conditions under which the Pentagon could use its artificial intelligence models, following a recent disagreement related to security concerns and the ethical use of the technology.

Blackstone reported that it will meet all redemption requests in its BCRED fund after investors sought to withdraw about 3.8 billion dollars (7.9% of assets), the highest level recorded for the strategy. The episode has increased scrutiny of the private credit sector.

The to-do list

Recommendation of the day

“You don’t have to be great to start, but you have to start to be great.”