MEXICO: April Unemployment Rate Rises to 2.54%

Tsys rally a little on the back of the previously outlined DeepSeek news, while wider core global FI is less impacted given the focus on readthrough for the U.S. economy/equities.

• Still moves in Tsys are modest with TY futures +0-04 over the last 30 minutes or so (next resistance at 112-12 intact), while yields are now 0.5-3.0bp lower on the day, curve bull flattens.

Italian April flash HICP inflation was two tenths lower than expected on a rounded basis at 2.1%, steady against March’s reading. 

• The downward surprise appears to be due to the energy component, which was -0.2% Y/Y (vs 2.7% prior). The few analyst estimates we had seen ahead of the release looked for an acceleration to over 4% on a base effect. CPI details suggest a sharp pullback in non-regulated energy prices in April.
• Core HICP inflation excluding energy and unprocessed foods ticked up to 2.2% Y/Y (vs 1.9% prior), with services accelerating to 3.4% Y/Y (vs 2.8% prior).
• Within services, Easter-timing related effects seem to be at play. Looking at the CPI details published by ISTAT: services related to transport (which includes air fares) accelerated to 4.4% Y/Y (vs 1.6% prior), as did restaurants and hotels (3.8% vs 3.3% prior).
• Non-energy industrial goods HICP inflation eased a touch to 0.4% Y/Y (vs 0.5% prior).
• Food components accelerated: Processed foods HICP to 2.4% Y/Y (vs 2.2% prior) and unprocessed foods more notably to 4.8% Y/Y (vs 3.6% prior).

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• President Donald Trump will host a Cabinet meeting this morning before delivering a second speech in two days.
• Armed with an EO to insulate the auto sector from ‘tariff stacking’, Trump gave a campaign rally-style speech in Michigan yesterday focused on immigration, an area where he retains public support.
• The Senate is expected to vote today on a symbolic resolution to block Trump’s reciprocal tariffs. Earlier this month, four Republican Senators joined with Democrats to vote in favour of a similar resolution.
• USTR Jamieson Greer assured Senate Republicans that market-soothing trade deals are in the works.
• The economy is starting to weigh heavily on Trump’s presidency, with consumer confidence falling to its lowest level since May 2020 and polling showing voters tie the economy to Trump.
• European Commission President Ursula von der Leyen warned Trump’s tariffs are a threat to global prosperity.
• Trump said China is likely to “eat” the cost of tariffs, despite signs that Chinese companies appear to be passing the duties to US consumers.
• Trump has again complicated the drafting of the 'big beautiful' reconciliation bill with tax demands.
• Senate Majority Leader John Thune (R-SD) said the Senate will address a landmark stablecoin bill before May 26.
• The US and Ukraine could sign a mineral deal as soon as today.  
• Poll of the Day: Americans are likely to cut back on discretionary purchases if tariffs provoke price rises.

Full Article: US DAILY BRIEF