Stocks in the US wrapped up a tough week with a rally on Friday, as the S&P 500 jumped 2.1%, the Dow Jones popped 674 points, and the Nasdaq 100 rose 2.5%. Easing fears of a government shutdown and investor resilience to weak consumer sentiment data helped lift markets. Senate Minority Leader Chuck Schumer signaled support for a Republican-backed funding bill, reducing political uncertainty. However, the University of Michigan’s consumer sentiment index plunged to 57.9, its lowest since November 2022, reflecting concerns over inflation and tariffs. Tech stocks led the rebound, with Nvidia soaring 5.3%, while Tesla, Meta, Amazon, and Apple all rose over 1%. Palantir also jumped 8.3%, defying concerns over potential defense spending cuts. Despite Friday’s gains, the S&P 500 and Nasdaq fell over 2% each for the week, while the Dow posted a 3.1% decline—its worst weekly performance since March 2023.

In the United States, investors will focus on the Federal Reserve's interest rate decision, which comes along with economic and "dot plot" interest-rate projections. Key US data include retail sales, industrial production, and housing market indicators, including housing starts, building permits, and existing home sales. Globally, interest rate decisions are expected from Japan, China, the UK, Brazil, Switzerland, and Sweden. Inflation data will be released for Canada and Japan, while China will report retail sales, industrial production, house price index, and fixed asset investments. In Europe, the UK’s unemployment rate and GfK consumer confidence, Germany’s ZEW economic sentiment, and Euro Area consumer confidence will be closely watched. Meanwhile, New Zealand’s GDP growth rate and Canada’s retail sales will also be in focus.

The Mexican peso strengthened past 19.9 per USD in March, reaching a four-month high, driven by its high interest rate differential and resilient external accounts. With Banxico’s benchmark rate at 10.50%, the currency benefits from an attractive carry trade amid easing U.S. rate expectations. In January, the country's trade surplus widened to $2.7 billion, buoyed by a 15.2% year-over-year surge in automotive exports—though much of this reflects distributors preparing for potential tariffs rather than sustained export momentum. Additionally, the government's calm, negotiation-focused approach to tariff disputes, has secured favorable concessions and minimal reciprocal measures in key sectors such as autos and electronics. Furthermore, subdued U.S. inflation data has spurred speculation about earlier Fed rate cuts, narrowing the U.S.-Mexico rate differential at a slower pace than expected and continuing to support demand for the peso despite ongoing tariff threats.

The British economy contracted 0.1% month-over-month in January 2025, following a 0.4% growth in December 2024, and worse than market expectations of a 0.1% gain. The largest downward contribution came from the production sector which fell 0.9%, after a 0.5% rise in the previous period. Manufacturing shrank 1.1% led by basic metals and metal products (-3.3%) and the manufacture of basic pharmaceutical products and pharmaceutical preparations (-3.1%). Mining and quarrying also contributed negatively with a 3.3% fall, largely because of a 3.7% contraction in extraction of crude petroleum and natural gas. Construction also declined 0.2%, following a similar fall in December. Services on the other hand, expanded 0.1%, after a 0.4% rise in the previous period, led by administrative and support services (1.9%) and wholesale and retail trade (0.7%). Considering the three months to January, the GDP in the UK grew 0.2%.

The yield on Germany’s 10-year Bund rebounded to 2.9%, its highest level since June 2011, following the country’s agreement on a debt overhaul and a significant increase in state spending. Incoming Chancellor Friedrich Merz reached an agreement with the Green and Social Democrat parties on Friday, paving the way for a parliamentary vote next week on borrowing rule reforms. The proposed changes would exempt defense spending from debt limits and establish a €500 billion fund for infrastructure investment. On the monetary policy front, investors scaled back expectations for additional European Central Bank rate cuts this year after policymakers adopted a more hawkish stance. President Christine Lagarde recently warned that trade war disruptions and increased government spending across Europe would make it increasingly difficult to keep inflation stable.

Retail sales in Brazil edged down 0.1% month-over-month in January 2025, following a downwardly revised 0.3% fall in December 2024, and compared to forecasts of a 0.2% drop. It marks the third straight month of falling retail sales, although the results point to a period of stability in the retail sector, according to Cristiano dos Santos, from IBGE. Sales of pharmaceutical, medical, orthopedic, and perfumery products recorded the biggest decline (-3.4%), followed by sales at hypermarkets, supermarkets, food products, beverages, and tobacco (-0.4%), furniture and appliances (-0.2%), and fabrics, clothing, and footwear (-0.1%). In contrast, sales rose office equipment and supplies, IT, and communication (5.3%), fuels and lubricants (1.2%), other personal and household items (0.7%), and books, newspapers, magazines, and stationery (0.6%). Year-on-year, retail sales increased 3.1%, above 2% in the previous month.