Daily Brief | August 6 2025

Top News

·     The Citi Survey anticipates a 25-basis-point rate cut by Banco de México.

·     Mexico’s Social Security Institute (IMSS) announced that 1.226 million jobs were created in July, the largest increase for any month on record. The surge is attributed to the launch of the pilot program for digital platform workers.

·     Retail sales in the Eurozone rose 3.1% year-over-year in June 2025, the strongest increase since September 2024. The figure exceeded both the 1.9% growth recorded in May and market expectations of a 2.6% gain.

·     U.S. President Donald Trump announced he will appoint a new Federal Reserve Board member this week. He is also evaluating four finalists to replace Jerome Powell as Fed Chair.

Economic Outlook

The Citi Survey anticipates a 25-basis-point cut in Banco de México’s benchmark rate. The survey’s consensus slightly raised its GDP growth forecast to 0.3% for 2025 (previously 0.2%) and 1.4% for 2026 (previously 1.3%). Notably, only 2 out of the 37 analysts surveyed still project a slight contraction in GDP for this year, suggesting that recession fears have largely subsided, even as expectations remain for moderate growth. Regarding inflation, the survey showed that respondents kept their forecasts unchanged at 4.0% for this year and 3.8% for next. Meanwhile, the consensus continues to expect Banco de México to cut its policy rate by 25 basis points on August 7. The benchmark rate is expected to close 2025 at 7.50% and 2026 at 6.75%. As for the exchange rate, expectations have been revised slightly stronger to 19.60 pesos per dollar by the end of this year (previously 19.85), and 20.16 pesos per dollar by the end of next year (previously 20.30). Overall, the mid-July survey showed few changes, though the key focus remains on the upcoming monetary policy decision at the beginning of next month.

Markets and Stocks

Futures for major U.S. stock indices were trading slightly higher this morning, supported by strong corporate earnings from companies such as McDonald’s, Shopify, and Arista Networks, and despite volatility stemming from President Trump’s tariff threats targeting sectors like pharmaceuticals, semiconductors, and energy. In Europe, markets were also trading higher, although the pharmaceutical sector declined following the threat of tariffs of up to 250% on medications, with Novartis and Roche leading the losses. In Asia, equity markets closed on a positive note.

In commodities, oil prices were rebounding from five-week lows, supported by expectations of possible supply disruptions due to trade tensions between the U.S. and India over purchases of Russian crude. Gold fell 0.3% to $3,369 per ounce, pressured by a rise in Treasury yields and investor caution ahead of Trump’s expected Fed appointment announcements.

In fixed income, the 10-year U.S. Treasury yield rose to 4.22%, while the 2-year yield held steady around 3.72%.

In Q2 2025, Industrias Peñoles reported revenues of US$2.079 billion, a 27.2% year-over-year increase, beating our expectations and supported by a continued favorable environment in precious metals markets. EBITDA rose 61.3% year-over-year to US$680 million, also exceeding projections, providing a positive reading for the report.

Grupo Aeroportuario del Centro Norte reported that total passenger traffic across its 13 airports grew 7.1% in July 2025 compared to the same month last year. Domestic passenger traffic rose 6.4%, while international traffic posted a solid 11.9% increase.

Corporate News

– Shares of McDonald’s were up more than 4% after beating expectations on both revenue and earnings, posting their strongest comparable sales growth in nearly two years.

– Meanwhile, shares of Snap fell nearly 18% after reporting second-quarter revenue below expectations.

– Lastly, Arista Networks shares rose around 13%, driven by better-than-expected results and guidance.