Morning View


Fed rules out benchmark rate cut in March, 10-year Treasury yield rises to 4.32


The minutes of the Federal Reserve's last monetary policy meeting at the end of January revealed that it is still premature to implement a cut in the reference rate -which remained at 5.5%- at the next meeting in March. In addition, concerns about a rebound in inflation and the risks derived from sustaining high rates for a longer period of time on economic activity were highlighted. 

In this context, U.S. Treasury bond yields showed an upward trend in all maturities at the end of yesterday's trading day. Thus, the yield on the 1-year bond advanced to 4.97%, the 3-year bond stood at 4.44%, while the 10-year bond ended at 4.32%.

On the stock market side, the main indexes in the United States traded with declines for the most part during yesterday's trading session. The Nasdaq was once again the worst hit, dropping -0.3%, followed by the S&P 500 with -0.1%. On the other hand, the Dow Jones differed, with a slight improvement of +0.1%. Thus, for the year, the indices accumulated increases of +3.8%, +4.2% and +2.4%, respectively.



In Mexico, December Retail Sales fell -0.9% month-over-month and -0.2% year-over-year

The performance of Latin American stock markets remained mixed. On the one hand, Colombia rose +1.9% and Peru +0.4%. On the other hand, Argentina contracted -1.8% and Chile -1.5%. 

Yesterday, in Mexico, retail sales for December were released, which registered -0.9% monthly and -0.2% annually, below market expectations (+0.2% and +2.5%, respectively).

During the day, Mexico will release inflation for the first half of February, the monthly economic activity index for December and, finally, the Gross Domestic Product (GDP) for the fourth quarter of 2023. The market expects GDP to register +0.1% quarterly and +2.4% annually.

In Argentina, sovereign bonds in dollars reversed the upward trend of the last rounds, accompanying the movement of global and emerging fixed income, averaging a decline of -1.4%. Within this performance, the most affected were those of local legislation, since they fell -1.6% on average, driven by the AL29 (-1.9%), while global bonds dropped +1.1%.


U.S. Treasury yields compressed, with the 1-year closing at 4.94%


U.S. Treasury yields compressed slightly across all maturities yesterday. As a result, the yield on the 1-year bond eased to 4.94%, while the 10-year ended at 4.27%.

On the other hand, the main stock indexes in the United States traded with generalized decreases during yesterday's trading session, after Monday's holiday. In this sense, the Nasdaq presented the most pronounced decline with -0.9%, followed by the S&P 500 with -0.7% and the Dow Jones with -0.2%. Nevertheless, for the year the indices accumulated increases of +4.1%, +4.2% and +2.3%, respectively.  

The epicenter of the day's attention will be the publication of the minutes of the last monetary policy meeting of the US Federal Reserve (Fed). It should be recalled that, in that instance, the decision was to maintain the reference rate in the current range of 5.25%-5.5%, in line with expectations.




Stock markets continue to show mixed performances

During yesterday's trading session, Latin American stock markets presented mixed performances. The Colombian stock market rose +2.1%, followed by the Brazilian stock market with +0.5% and then the Peruvian stock market with +0.1%. On the other hand, the Argentinean stock market contracted -1.2% and the Mexican stock market -0.6%.

Tomorrow, in Mexico, Retail Sales for December will be released and market expectations are +0.2% monthly and +2.5% annually. It is worth noting that November's figures were +0.1% and +2.7%, respectively.

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