Global markets start Wednesday cautiously: Asia mixed due to India-Pakistan tensions and Chinese data; Europe and the US are expectant of the Fed's decision.

Global financial markets began trading Wednesday, May 7, with a generally cautious tone, influenced by a mix of geopolitical tensions , economic data from Asia, and, predominantly, anticipation of the U.S. Federal Reserve's (Fed) next monetary policy announcement. In Mexico, the peso has appreciated slightly against the dollar, and fuel prices have been adjusted.

Stock markets in the Asia-Pacific region closed or were trading with mixed results in the final hours. The most disruptive factor was the military escalation between India and Pakistan, which caused a 6% drop in the Pakistani stock market, while the Indian market remained relatively stable. This reaction demonstrates how geopolitical instability directly impacts investor confidence.

In contrast, Chinese stock markets posted modest gains (CSI 300 +0.4%), and Hong Kong's Hang Seng gained 0.5%. These positive movements were driven by the People's Bank of China's decision to lower its benchmark interest rates and, crucially, by the confirmation of the start of trade talks with the United States, a signal that markets interpreted as a possible easing of Sino-US tensions.

Other major Asian markets showed more subdued performance: South Korea's KOSPI opened up 0.66% to 2,576.69 points, and Japan's Topix saw a slight rebound of +0.02%. The MSCI World Index had registered a 0.5% decline the previous day.

In Europe, stock market futures pointed to a moderately positive opening, with the German DAX futures up 0.1% and the Spanish IBEX 35 index flat. The Madrid Stock Exchange (IBEX 35) finally opened the session virtually unchanged, down less than a tenth of a percentage point, at 13.525 points.

Across the Atlantic, Wall Street futures were indicating gains of around +0.4% at the start of the session. This follows a previous day (Tuesday) of profit-taking, where the Nasdaq Composite lost 0.9%, the S&P 500 0.8% and the Dow Jones 1.0%, precisely due to investor caution ahead of the Fed meeting.

The Federal Reserve is the epicenter of global economic attention today. Although Fed Chairman Jerome Powell is widely expected to maintain a "wait and see" approach with no change to interest rates, due to the continued resilience of the US labor market and lingering inflationary risks, markets will closely analyze every word of his statement and press conference.

Any nuances regarding the future path of rates or the assessment of the economy could generate volatility. The market has already delayed its expectations regarding the start and extent of rate cuts. The Reference Interest Rate (Yield) on the 10-year US bond held steady at 4.32% at the opening bell.

In the foreign exchange market, the Mexican peso (MXN) has appreciated against the US dollar. The official exchange rate (DOF) stands at $19.6785 pesos per dollar, with an average at bank counters of $19.66. On platforms such as El Financiero, the last reported price was $19.59, with a positive variation for the peso of -0.41% (a lower figure indicates a stronger peso). The buying and selling prices at major banks are:

• Affirm: Sale $20.30
• Banco Azteca: Sale $20.15
• BBVA Bancomer: Sale $19.91 – $19.95
• Citibanamex: Sale $20.16

The euro/dollar exchange rate, meanwhile, rose slightly to 1.1364. Regarding fuel prices in Mexico, a drop in diesel prices was reported. Average prices in Mexico City at 1:00 AM were:

Regular gasoline was $23.807/liter, Premium was $25.686/liter, and Diesel was $25.719/liter. In Quintana Roo, the average prices were: Regular was $23.65, Premium was $25.59, and Diesel was $26.00; in Cancún, Magna was $23.99, Premium was $26.88, and Diesel was $27.93.

Below is a table showing the opening of the main global markets:

Table 1: Global Market Opening (May 7, 2025, AM Central Time)

| Region/Index | Opening/Current Value | Change (%) | Source(s) |

|—|—|—|—|

| KOSPI (South Korea) | 2,576.69 points | +0.66 | |

| CSI 300 (China) | (Unspecified) | +0.4 | |

| Hang Seng (Hong Kong) | (Not specified) | +0.5 | |

| Topix (Japan) | (Unspecified) | +0.02 | |

| DAX Futures (Europe) | (Not specified) | +0.1 | |

| IBEX 35 Futures (Eur) | (Not specified) | Plane | |

| S&P 500 Futures (US) | (Unspecified) | +0.4 (approx.) | |

Note: Specific opening values ​​for all indices were not available in all source materials; the reported percentage change is shown.

In the Mexican business world, Emmanuel Loo, Undersecretary of Investment for the Ministry of Economy of Nuevo León, stated that a second wave of nearshoring is expected for the state, considering a relaxation of tariffs from the United States to be key. The Private Sector Initiative (PSI) of Nuevo León, for its part, anticipates an economic impact of 1.25 billion pesos for Mother's Day. A positive development is that industrial companies in Nuevo León report a 57% decrease in losses due to highway robbery compared to the previous year, although the sector continues to express discontent with the persistence of this crime.

The economic day will be dominated by expectations for the Fed, but regional dynamics and local price and currency indicators will also play a crucial role in consumer and business decisions.

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