Daily brief

Top news

·     Industrial production in Mexico deteriorated more sharply in July, deepening the weakness of the sector at the start of the third quarter.

·     In the United States, consumer inflation for August came in higher than expected.

·     The ECB kept its benchmark rate unchanged at 2% but offered no clear signals about its next move. Although inflation is expected to fall below target in 2026, the institution avoided committing to future cuts for now.

·     The Mexican government announced plans to increase tariffs on cars imported from China and other Asian countries to 50%, as part of a broad reform to the import scheme.

Economic outlook

Industrial production in Mexico deteriorated more sharply in July, deepening the weakness of the sector at the start of the third quarter. In the seventh month of the year, industrial activity fell -2.8% y/y on a seasonally adjusted basis, in a context marked by a broad-based contraction across sectors. By components, mining dropped -5.9% y/y, electricity, water, and gas supply declined -3.7% y/y, construction fell -4.1% y/y, while manufacturing decreased -1.8% y/y, reflecting a wider and more synchronized deterioration. On a monthly basis, industrial production posted a -1.2% contraction, the sharpest so far this year. Within the index, manufacturing declined -1.6%, construction fell -1.2%, the energy sector slipped -0.1%, and mining was the only segment to post growth, rising 1.9%. Overall, the data shows a weak start for Q3 2025 in industrial activity, with signs of setbacks across all segments except mining, although mining still shows significant lag in annual terms. The performance suggests that the adverse environment for the industrial sector persists, with little room for a solid recovery in the short term.

In the United States, consumer inflation for August came in higher than expected. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) for the eighth month of 2025 rose 0.4% m/m, after growing 0.2% in July, on a seasonally adjusted basis. The increase was driven by broad-based rises in food, energy, and housing. On an annual basis, headline inflation reached 2.9%, its highest level in seven months, and above the 2.7% recorded in July, according to non-seasonally adjusted figures. Meanwhile, core inflation, which excludes the most volatile components such as food and energy, rose 0.3% m/m and remained at 3.1% y/y, both unchanged from the previous month. Overall, the report showed a less favorable picture, with broader and more persistent inflationary pressures within the core index. Nonetheless, futures markets for the federal funds rate still price in a 25-basis-point cut at the September meeting, in a context where recent labor market weaknesses could weigh more heavily on the Federal Reserve’s decision.

Markets and stocks

Futures for the main U.S. indexes were trading slightly positive this morning after the latest inflation data showed a 0.4% monthly increase in August, above the 0.3% expected, though the annual figure was in line with estimates at 2.9%. This was accompanied by a rebound in weekly jobless claims, which reached 263,000. As a result, markets are discounting that the Federal Reserve will cut its benchmark rate by 25 bps next week, leaving the door open for additional cuts this year. In Europe, markets advanced after the European Central Bank’s decision to keep the deposit rate unchanged at 2%, with new projections placing inflation at 1.9% by 2027. In Asia, the Nikkei 225 hit a new record high, supported by companies like SoftBank, following reports of an agreement between OpenAI and Oracle.

In commodities, oil pulled back after three consecutive sessions of gains, while gold hovered near record highs, trading at 3,630 dollars per ounce.

In fixed income, U.S. Treasury yields fell, with the 10-year yield at 4.02% and the 2-year at 3.51%, reflecting expectations of rate cuts.

Corporate news

Kroger raised its full-year sales guidance after reporting a quarter with better-than-expected results, supported by strong performance in fresh foods, e-commerce, and pharmacy. The supermarket chain seeks to regain growth after canceling its merger with Albertsons, focusing on optimizing its core business and improving profitability in digital operations.

Opendoor appointed Kaz Nejatian, former Shopify executive, as its new CEO and named its cofounder Keith Rabois as chairman of the board, while Eric Wu returned as a board member. The announcement boosted the stock more than 30%, consolidating the rally that has multiplied its value more than fifteenfold since June.

Klarna debuted on the New York Stock Exchange with an initial gain of 15%, reaching a valuation close to 17 billion dollars after pricing shares at 40 dollars each. The Swedish “buy now, pay later” firm raised 1.37 billion dollars and will seek to accelerate its expansion in financial services, including the launch of its card in the U.S., while facing increased competition from Affirm and Afterpay.