The Global Indicator of Economic Activity (IGAE) recorded a 0.9% monthly contraction in January, its largest decline since December 2024. By sector, primary activities fell 3.7%, secondary activities 1.1%, and tertiary activities 0.6% on a monthly basis. On an annual basis, the IGAE grew 0.5%, with primary activities rising 2.4% and tertiary activities 0.9%, while secondary activities posted a slight contraction of 0.1%.

Our take

The IGAE confirms that economic momentum in Mexico weakened at the start of the year, mainly due to weakness in the secondary sector and a loss of traction in services. On an annual basis, growth is supported by primary activities, suggesting a fragile expansion. The data point to a weak first quarter, compounded by external uncertainty.

Fighting between Iran and the alliance of the United States and Israel continued without pause, despite President Donald Trump stating that talks are underway to end the conflict. It remains unclear how far unofficial negotiations have progressed or whether the Islamic Revolutionary Guard Corps is willing to reach an agreement at this stage, while still maintaining firm control over the Strait of Hormuz. For now, financial markets remain cautious, and oil prices are stabilizing slightly above $100 per barrel.

Our take

There is significant uncertainty regarding the extent to which both sides are negotiating an end to the war. What does seem clear is that at least the U.S. and President Trump appear interested in initiating de-escalation. However, it is still difficult to assess whether they will succeed and under what conditions.

Private sector activity in the Eurozone grew at its slowest pace since May 2025, as the war with Iran drives inflationary pressures and threatens an already fragile economic recovery. The S&P Global Composite PMI fell to 50.5 in March from 51.9 the previous month, though it remained above the 50 threshold that separates expansion from contraction. Analysts had expected a reading of 51.0.

Our take

The conflict in the Middle East puts at risk an already modest economic growth outlook, while markets begin to price in the need for higher interest rates to contain a renewed inflation spike. There is still hope that the conflict will end soon, but investor optimism is fading amid signs of lasting damage to oil and gas infrastructure.

The European Commission reported that, according to its preliminary March reading, the Eurozone consumer confidence index fell to -16.3 from -12.3 in February. Analysts had expected an even lower reading of -20.2. This marks the lowest level since October 2023 and remains below its long-term average.

Our take

The decline reflects growing concern about economic prospects, with tensions in the Middle East pushing energy prices higher and increasing inflationary pressures.

Markets and Stocks

WTI rose more than 4% toward $92 per barrel, while Brent held just above $100, reversing part of Monday’s decline. The spread between both benchmarks remains historically wide, reflecting differences in supply availability between the U.S. and the rest of the world. European natural gas maintained gains of over 100% since late February. Gold traded mostly flat around $4,400, consolidating losses of more than 10% this month. Meanwhile, copper remained under pressure amid deteriorating global growth expectations, while precious metals miners posted weekly declines between 3% and 8%.

Corporate News

Apollo Global Management restricted redemptions in its main non-traded private credit fund for retail investors to 5% of asset value, after receiving withdrawal requests equivalent to 11.2%. Meanwhile, a fund managed by Future Standard and KKR was downgraded to speculative grade by Moody’s, an uncommon event in the private credit market.

A California judge is holding the first formal hearing today in the case of Anthropic versus the Department of Defense, where the company is seeking an injunction to temporarily suspend its designation as a supply chain risk for the military. Microsoft, several former generals, and more than 30 employees from Google and OpenAI have filed briefs supporting Anthropic.

Estée Lauder confirmed it is in talks with Spain’s Puig group regarding a potential business combination. The deal would create a beauty and luxury group with combined annual revenues of approximately $20 billion and an estimated valuation of $40 billion.

The to-do list

Quote of the day

"Clarity about what matters provides clarity about what does not matter."