Daily Brief | July 24 2025

Top News

·     In Mexico, overall inflation surprised on the downside due to lower pressures from the most volatile component.

·     The European Central Bank (ECB) kept its interest rates unchanged.

·     The Eurozone composite PMI for July stood at 51 points, above the 50.6 observed in June and the market expectation of 50.8 units.

·     Japan’s manufacturing PMI index fell from 50.1 in June to 48.8 in July, while the services PMI rebounded from 51.7 to 53.5 for the same period. 

Economic Outlook

In Mexico, overall inflation surprised on the downside due to lower pressures from the most volatile component. INEGI reported that the National Consumer Price Index for the first half of July registered a variation of 0.15%, below the market consensus expectation of 0.25% and our own expectation of 0.27%. In its annual variation, overall inflation stood at 3.55% in the first half of July. Core inflation, which excludes the most volatile items, such as energy and agriculture, and government tariffs, grew by 0.15% in the first half of July, practically in line with our estimate (0.16%) and below the consensus estimate (0.20%). In its annual variation, core inflation stood at 4.25%. By component, goods stood at 4.01% y/y and services at 4.49% y/y. With regard to the most volatile item, non-core inflation stood at 1.24% at an annual rate. In our opinion, the decline in inflation is temporary and is mainly due to last year’s high base of comparison, as well as lower pressures from agricultural products. In this regard, and according to our estimates, it is likely that the figures will return to their levels of between 4 and 4.2% starting in the second half of August.

The European Central Bank (ECB) kept its interest rates unchanged. The ECB kept its reference rates unchanged, with the deposit rate remaining at 2.0%, the refinancing rate at 2.15% and the lending rate at 2.4%. With regard to the inflation environment, the European Central Bank considers that the information is in line with its central scenario, i.e., lower internal price pressures and wages growing at a slower rate. However, the Bank acknowledges that this environment is particularly uncertain, especially due to trade disputes. As such, it will continue to take a completely data-dependent stance in order to set the necessary position to meet its single inflation target of 2.0% in the medium term. In our opinion, it is very likely that the ECB is waiting for the outcome of trade negotiations with the US before making its next monetary policy decisions.

Markets and Stocks

Futures on major US indices were mixed this morning as investors reacted to the latest round of corporate earnings reports, notably from Tesla and Alphabet. Added to this was attention to progress in trade negotiations between the US and the European Union, where both sides appear close to an agreement to maintain reciprocal tariffs at 15%. In Europe, markets were mixed after the European Central Bank kept its interest rate unchanged at 2%, citing an uncertain economic environment, especially due to ongoing trade negotiations with the US. In Asia, markets closed higher.

In the commodities market, oil prices rose on a larger-than-expected drop in US inventories and optimism about trade agreements that could boost demand. Gold continued its decline, trading at $3,353 per ounce, affected by lower appetite for safe-haven assets.

In fixed income, US Treasury bond yields traded slightly higher. The 10-year bond stood at 4.43%, while the 2-year bond stood at 3.92%.

NEXT 25 published the notice of placement of its public offering of certificates, with an issue date of today and a settlement date of July 25. The offering consisted of approximately 8 billion pesos, at a price of 100 pesos per certificate. The fiber starts with a portfolio of nine Class A industrial properties and 100% occupancy. Subsequently, a joint venture is expected to be formed, with Fibra Uno contributing its industrial portfolio.

In 2Q25, Gentera’s total loan portfolio grew by 21.6% year-on-year. Net income increased 77.6% y/y. The results were above expectations, and we see a positive implication from the report. Gentera revised its earnings per share guidance for the year upward to a range of $5.0 to $5.15, which would represent annual growth of between 31% and 35%.

In 2Q25, Bajío reported portfolio growth of 6.7% yoy, financial margin before reserves fell 5.4% yoy, and net income decreased 23.9% yoy. In terms of net income, the report was below expectations. Additionally, Bajío revised its guidance for 2025 downward. Therefore, we see a negative implication from the report.

In 2Q25, Fibra Monterrey reported a 34.9% y/y increase in revenue, while net operating income increased 36.6% y/y and operating cash flow grew 8.4% y/y. The results were solid and in line with our expectations, so we see a neutral implication from the report.

In 2Q25, Orbia reported revenues of $1.967 billion, virtually unchanged from the same period last year, while EBITDA fell 10% y/y. The EBITDA margin fell 166 basis points to 15.2%. The report was in line with expectations, and we see a neutral implication. Results continue to be pressured by the Polymers and Infrastructure segments, with more stable performance in Netafim and Dura-Line.

Cemex reported weak but neutral figures for Q2 2025. Revenue stood at $4.126 billion (-5.3% YoY), while EBITDA stood at $823 million (-11.7% YoY). Net income increased 38%.

Corporate News

– Tesla reported a second consecutive quarterly decline in automotive sales revenue, reflecting lower demand and growing competition in Europe and China. The expiration of federal tax credits for electric vehicles in the US is also weighing on future expectations. Elon Musk warned that they could face difficult quarters ahead.

– Alphabet exceeded revenue and profit estimates thanks to strong performance in Google Cloud and YouTube advertising. Revenue growth was 14% year-on-year, and net profit increased 20%. The company raised its artificial intelligence investment budget to $85 billion by 2025, citing strong demand for its infrastructure.

– IBM reported better-than-expected results, but with weakness in its software business, where revenue and margins fell short of consensus estimates. The company attributed this to more cautious spending decisions by its customers and the fact that part of the budget was redirected to infrastructure.