Daily Brief | August 8 2025

Top News

·     Banxico cut the benchmark rate by 25 basis points and could do so again in September.

·     Later today, China’s July consumer inflation will be released, with the market consensus expecting it to come in at -0.1%.

·     U.S. President Donald Trump nominated Stephen Miran to fill the vacancy left by Governor Adriana Kugler, whose term was set to end on January 31, 2026.

·     Canada reported a loss of 40,800 jobs in July. The unemployment rate stood at 6.9%, its highest level in several years.

Economic Outlook

Banxico cuts the benchmark rate by 25 basis points and could do so again in September. In a split decision, Banco de México deemed it appropriate to continue its rate-cutting cycle, lowering the policy rate by 25 basis points to 7.75%. For the second consecutive meeting, Deputy Governor Jonathan Heath voted to keep the rate unchanged. In its forward guidance, Banxico’s Governing Board signaled it will consider additional cuts to the benchmark rate, suggesting the easing cycle could continue. However, several challenges lie ahead: 1) uncertainty over whether the Fed will resume rate cuts, 2) the potential for renewed peso depreciation amid global volatility, and 3) persistent upward revisions to core inflation, complicating Banxico’s path toward its 3.0% inflation target. In this context, we expect Banxico to cut the policy rate by another 25 basis points at its next meeting scheduled for late September; however, we believe further moves may occur only if the Federal Reserve also resumes its easing cycle.

Markets and Stocks

U.S. stock index futures were higher on Friday, after the previous session saw the S&P 500 fall 0.08% and the Nasdaq rise 0.4%. Investors remain focused on the evolution of Donald Trump’s trade policy, with reciprocal tariffs taking effect Thursday—reaching as high as 41% for some countries—while excluding semiconductor manufacturers that produce in the U.S. In addition, the president nominated Stephen Miran to fill a vacancy on the Federal Reserve Board of Governors. For the week, the S&P 500 is up 1.6%, the Dow 0.9%, and the Nasdaq 2.9%.

U.S. Treasury yields were little changed Friday as investors assessed the economic impact of the latest tariff developments. The 10-year yield edged up to 4.26%, while the 2-year yield stood at 3.75%.

In commodities, oil prices were steady Friday but are on track for their biggest weekly drop since late June amid concerns over the economic impact of U.S. tariffs. Brent is down more than 4% for the week, and WTI more than 5%, also pressured by OPEC’s decision to reverse its main production cuts in September. Meanwhile, gold futures hit an all-time high, and spot gold is heading for a second consecutive weekly gain, supported by trade uncertainty and expectations of U.S. interest rate cuts.

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

Corporate News

– Under Armour reported first-quarter results below expectations, with adjusted earnings of $0.02 per share versus the $0.03 estimated.

– Wynn Resorts posted quarterly earnings of $1.09 per share, missing the $1.21 consensus estimate.

– Expedia beat second-quarter forecasts on both revenue and earnings and raised its full-year outlook for bookings and sales.

– Microchip Technology issued fiscal second-quarter guidance that disappointed the market, projecting adjusted earnings between $0.30 and $0.36 per share and revenue between $1.11 billion and $1.15 billion.