Daily Brief | August 7 2025

Top News

·     In Mexico, overall inflation in July was in line with expectations.

·     Later today, the Bank of Mexico will announce its monetary policy decision, for which we estimate a 25 basis point cut. We do not rule out the possibility of a split decision.

·     In Mexico, new car sales fell by 0.6% y/y in July, while new vehicle production increased by 2.36% y/y and exports rebounded by 7.94% y/y.

·     The Bank of England cut its interest rate by 25 basis points to 4.0% in a very divided vote, with four of the nine members of the governing board voting to keep it unchanged.

Economic Outlook

In Mexico, overall inflation in July was in line with expectations. INEGI reported that the National Consumer Price Index for July registered a variation of 0.27%, practically in line with the market consensus expectation of 0.28% and our own expectation of 0.29%. In its annual variation, overall inflation stood at 3.51% in July. Core inflation, which excludes the most volatile items such as energy and agriculture, and government tariffs, grew by 0.31% in the seventh month of the year, also very close to our estimate (0.29%) and the consensus (0.30%). In its annual variation, core inflation stood at 4.23%. By component, goods stood at 4.02% y/y and services at 4.44% y/y. With regard to the most volatile item, i.e., non-core inflation, it stood at 1.14% at an annual rate. In our opinion, the inflation data do not change the expectation of a 25 basis point cut in the reference rate by the Bank of Mexico.

Markets and Stocks

Futures on major US indices were trading higher this morning, driven by the technology sector, after President Donald Trump announced a 100% tariff on imported semiconductors, albeit with broad exemptions for companies that manufacture in the US. Apple rose after announcing an additional $100 billion investment in local suppliers. In Europe, markets were mixed following the Bank of England’s decision to cut its benchmark rate by 25 basis points to 4% in a split vote that reflected growing uncertainty about the economic outlook. In Asia, markets closed mostly higher.

In the commodities market, oil prices showed moderate gains. Expectations of a meeting between Trump and Putin raised hopes for a diplomatic resolution to the war in Ukraine, while US inventories showed a larger-than-expected decline. Meanwhile, gold gained ground amid renewed trade tensions and a weakening dollar, trading at around $3,383 per ounce, with projections of a potential rise to $3,500 if global uncertainty persists.

In fixed income, the yield on the 10-year Treasury bond remained around 4.23%, while the 2-year yield stood at around 3.72%. Investors continue to anticipate a rate cut by the Federal Reserve in September, with a probability of over 90%.

Volaris reported its traffic figures for July. Capacity (ASMs) grew 6.0% y/y, while RPMs remained stable. In the domestic segment, RPMs fell 0.4%, and in the international segment, they increased 1.0%. The consolidated load factor decreased 5.0 percentage points to 84.9%. The airline carried 2.8 million passengers during the month.

Corporate News

– Apple announced an additional $100 billion investment in suppliers and manufacturing in the US as part of its strategy to maintain exemptions under the new tariff regime on chips.

– The experimental oral obesity drug orforglipron, developed by Eli Lilly, yielded results below market expectations. Although it is expected to be a more accessible alternative to current injections, investors reacted negatively.

– Airbnb projects more moderate growth in the second half of the year. While it exceeded expectations in revenue and profit, it warned of a slowdown in North America. It also announced a share buyback program of up to $6 billion and increased investments in new verticals.

– Firefly Aerospace priced its IPO at $45 per share, above the estimated range, raising $868 million and valuing the company at $6.3 billion. Its debut on Nasdaq under the ticker FLY marks another addition to the group of space companies that have gone public this year.