Daily Brief | August 19 2025

Top News

·     Trump promises security guarantees for Ukraine in a potential peace agreement, although major disagreements persist between Western allies and Moscow.

·     The IOAE, a nowcasting model for IGAE, estimates that the Mexican economy grew 0.7% y/y in June 2025 and 0.1% y/y in July 2025, based on seasonally adjusted figures.

·     S&P reaffirmed the U.S. sovereign credit rating at ‘AA+’ with a stable outlook. In its statement, the agency noted that it expects higher tariff revenues to offset weaker fiscal outcomes resulting from tax cuts and increased spending.

·     Moody’s is considering raising PEMEX’s credit rating by up to two notches, citing improvements in the oil company’s Strategic Plan and additional information about its debt-reduction strategy.

Economic Outlook

Trump promises security guarantees for Ukraine in a potential peace agreement, although sharp disagreements persist between Western allies and Moscow. At a summit held in Washington with the presence of Volodymyr Zelenskiy and European leaders, the U.S. president offered joint support with Europe to safeguard Kyiv’s security —a gesture received as “a major step forward” by the Ukrainian leader, who even raised the prospect of purchasing $90 billion worth of U.S. weaponry. Nevertheless, the path to peace appears complex: while Russia ruled out any NATO involvement in implementing an agreement and conditioned progress on territorial concessions, European leaders insist that a ceasefire must be a prerequisite for any negotiations. Trump, by contrast, has adopted Moscow’s narrative by considering it viable to work on a comprehensive arrangement while hostilities continue, fueling concerns that Washington may seek to accelerate an outcome under terms favorable to the Kremlin. With the possibility of a meeting between Putin and Zelenskiy in Hungary in the coming weeks, the scenario presents a delicate balance between the pressure to end the war and the risks of compromising Ukraine’s territorial integrity —a key factor for the continent’s future stability.

Markets and Stocks

U.S. equity futures trade higher this morning as investors digest weak earnings from Home Depot and await results from other major retailers such as Walmart and Target. Attention is also focused on the Jackson Hole symposium, where Jerome Powell may hint at a September rate cut, in what would be his last appearance as Fed chair at this event. In Europe, markets are posting moderate gains following the Washington meeting between Trump, Zelenskiy, and European leaders, which signaled progress in peace negotiations. In Asia, equities closed lower, led by a drop in SoftBank shares after it announced an investment in Intel.

In commodities, oil prices are retreating on expectations that a potential agreement between the U.S., Ukraine, and Russia could lead to the lifting of sanctions on Russian crude, increasing global supply. Gold, meanwhile, is rising on a weaker dollar, with markets awaiting Powell’s remarks later this week.

In fixed income, U.S. Treasury yields remain stable, with the 2-year note at 3.75% and the 10-year at 4.32%, as investors look ahead to the release of Fed minutes and fresh signals on the policy rate path.

Corporate News

– SoftBank will invest USD 2 billion in Intel, equivalent to a 2% stake in the company. The move represents a vote of confidence in the new leadership under Lip-Bu Tan and in the effort to consolidate its semiconductor business, despite challenges from Nvidia and the lack of major clients in its manufacturing division.

– Palo Alto Networks beat estimates and raised its annual guidance, just weeks after announcing the USD 25 billion acquisition of CyberArk, the largest in its history. The company also confirmed the retirement of its founder and CTO, Nir Zuk, who will be replaced on the board by Chief Product Officer Lee Klarich.

– Home Depot reported its second consecutive drop in profits and sales, something not seen since 2008 and 2014 respectively, although it maintained its annual outlook. The company highlighted a rebound in sales in July and expressed confidence in greater momentum in the second half of the year, supported by professional customers and potential rate cuts.