Business sentiment deteriorated in Germany in March
It was weighed down by worsening corporate expectations amid the conflict in Iran
Markets and Stocks
In the United States, futures on major indices traded with a positive bias, while European markets posted gains, heading toward a third consecutive session of advances—the first positive streak since the start of the Middle East conflict. WTI fell around 5% to $88, and Brent dropped below $100 after the U.S. sent Iran, via Pakistan, a 15-point plan to end the war, addressing Iran’s nuclear program and maritime routes. However, Iran’s Fars agency reported that Tehran formally rejected any ceasefire. Gold snapped a nine-session losing streak, rising nearly 2%, while bonds also gained ground, with the 10-year Treasury yield falling toward 4.31%. China urged Iran to enter negotiations “as soon as possible.”
Key points
The U.S. proposes a 15-point plan to Iran to end the war; Iran rejects it.
Inflation remained elevated in the UK in February.
U.S. private sector activity slowed in March as inflationary pressures increase.
Mortgage rates in the U.S. rise further, reaching a five-month high.
Monitor
Bolsas / Exchanges
Activo
Valor
Variación_pct
S&P 500
6,655
0.70%
Nasdaq
24,435
0.90%
Dow Jones
46,785
0.80%
IPyC
65,701
0.00%
Monedas / FX (Foreign Exchange)
Activo
Valor
Variación_pct
USD/MXN
17.7570
0.10%
EUR/MXN
20.5944
0.10%
EUR/USD
1.1593
-0.10%
Índice DXY
99.39
0.00%
Tasas / Exchange Rates
Activo
Valor
Variación_pct
Treasury 2 años
3.88
-5.9 bp
Treasury 10 años
4.33
-6.2 bp
TIIE 3 meses
7.12
2.0 bp
M Bono 10 años
9.45
0.0 bp
Commodities / Commodity Markets
Activo
Valor
Variación_pct
Petróleo (Brent)
99.82
-4.50%
Oro
4,545.00
1.60%
What you need to know about the economy and markets
According to Germany’s IFO institute, the business climate index fell to 86.4 in March from 88.4 in February, marking its lowest level since February 2025. The expectations sub-index for the next six months declined to 86.0 from 90.2. The drop was directly linked to corporate concerns about the potential impact of the Middle East conflict on economic growth and inflation.
Our take
The effects of the war between the United States and Israel against Iran are becoming increasingly evident. After reaching its highest level since last summer, rising energy prices and uncertainty stemming from the Middle East conflict have weighed on business expectations.
The U.S. has presented a 15-point peace plan to Tehran through mediators. According to The New York Times, the proposal was delivered via Pakistan and addresses key issues such as Iran’s nuclear program, ballistic missiles, and maritime security. However, early Wednesday, Iranian sources rejected the proposal, stating that conditions are not yet in place.
Our take
Details of the 15-point proposal remain unclear, although financial markets initially reacted positively and oil prices declined slightly. The U.S. initiative reflects an attempt to pursue a diplomatic exit. The conflict has now lasted close to a month, longer than initially expected, raising the likelihood of sharp price increases, even in the event of a ceasefire.
UK inflation held at 3% annually in February, unchanged from the previous month and in line with market expectations, marking the last reading before the impact of the Iran conflict on prices. Core inflation, which excludes energy, food, alcohol, and tobacco, edged up to 3.2% from 3.1% in January.
Our take
The February data does not yet reflect the impact of the Iran conflict, which has driven a sharp rise in global energy prices. The UK is particularly vulnerable to this energy shock due to its dependence on hydrocarbon imports and limited gas storage capacity, which will likely translate into higher inflation in the coming months.
The U.S. composite PMI by S&P Global fell to 51.4 in its preliminary March reading (an 11-month low) from 51.9 in February. Meanwhile, the manufacturing PMI rose to 52.4 (a two-month high), while the services PMI fell to 51.1 (an 11-month low) from 51.7.
Our take
Preliminary PMI readings for March point to an unfavorable mix of slower growth and rising inflation following the outbreak of the Middle East conflict. Businesses report weaker demand due to heightened uncertainty and the cost-of-living impact driven by the conflict.
Mortgage rates in the U.S. rose for the third consecutive week, pushing housing financing costs to their highest level since October. The 30-year rate increased by 13 basis points to 6.43% in the week ending March 20. Over the past three weeks, rates have risen by 34 basis points, the largest increase since November 2024. The mortgage purchase index fell 5.4%, its sharpest drop since January, while refinancing applications plunged another 14.6%.
Our take
The return of the 30-year mortgage rate to 6.43% reinforces a deterioration in housing affordability, threatening to slow housing market momentum during the spring season, historically the most active period of the year in the U.S. Rising oil prices driven by the Iran conflict and uncertainty around tariffs are putting upward pressure on long-term interest rates.
Markets and Stocks
Copper rose up to 2% on the London Metal Exchange, accumulating a nearly 3% weekly gain after falling about 11% over the previous three weeks, supported by optimism around the U.S. 15-point peace plan and China’s call for negotiations. However, Iran’s rejection of the ceasefire reported by Fars tempered some of the initial optimism: copper’s rebound largely depends on expectations of a swift resolution, and any sign of prolonged conflict could quickly reverse it. WTI r
Corporate News
At its Annual Shareholders’ Meeting, Arca Continental announced a capital investment plan of approximately 18.5 billion pesos for 2026, evenly split between its operations in Mexico and its businesses in the United States and South America. Funds will be allocated to process optimization, machinery and infrastructure, sales equipment, digital tools, and the development of new beverage categories.
Our take
The investment plan signals a commitment to sustained organic growth rather than a defensive stance amid global macro uncertainty. Geographic diversification, with significant exposure to the U.S. and South America, remains one of the company’s most valued strengths relative to its local peers.
Coca-Cola FEMSA (KOF) declared a cash dividend of 7.74 pesos per KOF UBL unit, distributed in four equal installments of 1.935 pesos each, to be paid in April, July, October, and December of this year.
Our take
The dividend represents a yield of 4.60%.
SpaceX plans to file its IPO prospectus with the SEC as soon as this week or next, according to The Information. If confirmed, it would be one of the most anticipated IPOs in financial market history. The company, led by Elon Musk and valued in the hundreds of billions in private markets, operates the Starlink satellite network, Falcon rocket program, and Starship development, and has gained additional strategic relevance amid the Iran conflict due to its role in military communications.
Arm Holdings announced it will sell its own artificial intelligence chips for data centers for the first time, projecting annual revenue of approximately $15 billion within five years from this new business. The company, which has historically operated as a designer of processor architectures licensed to third parties, is moving toward vertical integration that could transform its business model. Shares rose 12% in pre-market trading.
Merck agreed to acquire Terns Pharmaceuticals in a deal valued at $6.7 billion, strengthening its oncology pipeline ahead of upcoming patent expirations. Terns has an experimental cancer treatment with promising late-stage clinical results.
The to-do list
Closely follow any updates on the 15-point peace plan: Iran rejected it this morning, but markets are still pricing in diplomatic hope.
Monitor oil prices: Brent fell below $100, but volatility remains high and any statement from Tehran could reverse the move.
Review fixed income positions: the 10-year Treasury yield fell toward 4.31% and gold broke its losing streak, rotation is underway.
It’s Wednesday, midweek: check whether you are on track with your tasks and reassess priorities for Thursday and Friday.
Stay alert to Coca-Cola FEMSA’s dividend and evaluate potential opportunities ahead of the first April payment.
Go for a walk today, amid constant contradictions in headlines about Iran, it’s worth clearing your head midweek.
Quote of the day
"In uncertainty, the one who stays calm has an advantage over the one who reacts."
Warren Buffett.
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