Daily Brief | August 21 2025

Top News

·     In Mexico, retail sales declined in June.

·     Eurozone PMIs show a recovery in activity in August, driven by a rebound in manufacturing (50.5 vs. 49.8 prev) and manufacturing output (52.3), while the services sector eased slightly to 50.7 points (51.0 prev).

·     The United States and the European Union formalized a pact to reduce tariffs on autos, pharmaceuticals, and semiconductors, while continuing negotiations on steel, aluminum, and investment commitments in strategic sectors.

·     The U.S. Vice President stated that peace talks are focused on security guarantees for Ukraine and the territory demanded by Russia. Trump is pushing for a meeting between Putin and Zelenskiy to unlock progress.

Economic Outlook

In Mexico, retail sales declined in June. INEGI reported that retail sales fell -0.4% m/m, below the consensus expectation of a flat reading, after the solid 1.8% rebound observed in May. On an annual basis and using original figures, sales grew 2.5% y/y, with strong increases in online and catalog sales (+50.6%), stationery and leisure goods (+11.3%), and household appliances, computers, and home décor items (+7.0%). Gains were also seen in health care products (+3.0%), motor vehicles, parts and fuel (+3.1%), and hardware and building materials (+2.6%). In contrast, declines were observed in textiles, jewelry, and footwear (-2.2%). At the state level, growth was led by Guerrero (+14.4%) and Mexico City (+4.7%), although most states posted annual growth rates around 2%. Overall, the data suggest that consumption remains resilient in certain segments, though with clear signs of moderation and heterogeneity in performance.

Markets and Stocks

U.S. equity futures traded slightly lower this morning, extending Wall Street’s losing streak amid pressure on tech stocks and anticipation of Jerome Powell’s speech at Jackson Hole. In Europe, markets traded in negative territory after the release of details on the trade agreement with the U.S., which includes 15% tariffs on autos and pharmaceuticals. In Asia, performance was mixed.

In commodities, oil prices rebounded about 0.3%, supported by strong demand in the U.S. and uncertainty surrounding the conflict in Ukraine. Gold, meanwhile, edged down 0.2%.

In fixed income, the U.S. 10-year Treasury yield rose to 4.31%, while the 2-year yield climbed to 3.76%, as investors awaited Powell’s signals at Jackson Hole regarding the future path of rates.

Corporate News

– Walmart reported its first profit decline in three years, pressured by higher insurance claims, legal costs, and restructuring expenses. Although the company raised its sales and earnings guidance for the year, the market penalized the margin pressure and the initial impact of tariffs on its prices.

– Boeing gained after reports that the company is in talks with China to sell up to 500 aircraft, a deal contingent on easing trade tensions between the two countries. The market welcomed the prospect of a record order that could end the drought of bookings in its largest international market.

– Google unveiled its new Pixel 10 lineup, along with the Pixel Watch 4 and Pixel Buds 2a, all featuring deeper integration with its Gemini AI platform.