The August Citi Expectations Survey showed a marginal improvement in the outlook for the Mexican economy. The median GDP growth forecast for 2026 increased to 1.2% from 1.1% in the previous survey, while the year-end headline inflation forecast declined to 4.02% from 4.09%, and the core inflation forecast fell to 4.00% from 4.10%. In contrast, expectations for the overnight rate remained unchanged at 6.50% for the end of both 2026 and 2027, as did the exchange rate forecast of 17.90 pesos per dollar for 2026.

Our Take The survey results point to a scenario of slightly stronger optimism regarding economic growth, accompanied by more moderate inflation expectations, supporting the view that Banxico will leave the overnight rate unchanged for the remainder of the year. Inflation forecasts remain above the 3% target. However, as inflation has continued to moderate, there are differing views among analysts regarding whether the central bank will eventually adopt a more restrictive stance or move toward monetary easing.

Initial jobless claims in the United States totaled 199,000 last week, a slight increase from the previous week but below the expected 205,000, remaining below the 200,000 threshold for the third consecutive week.

Our Take The data reinforces the narrative of a U.S. labor market that continues to demonstrate resilience despite signs of moderation observed in other economic activity indicators.

Eurozone retail sales fell 0.3% month-over-month in June after increasing 0.4% in May, while annual growth slowed to 0.7% from the previous 1.9%. As a result, the second quarter ended with weak private consumption, which is unlikely to have been a meaningful driver of regional economic growth.

Our Take Weak retail sales reinforce the view that consumption made only a limited contribution to growth during the second quarter. While some recovery could emerge in the coming months, the outlook still does not point to a significant rebound in household spending in the near term.

German factory orders rose strongly in June, increasing 3.1% month-over-month, well above the 0.3% gain recorded in May. The positive performance of new manufacturing orders was driven primarily by significant increases in machinery and equipment manufacturing (+12.7%) and in the production of computers, electronic, and optical products (+22.7%).

Our Take The strong rebound provides an encouraging signal of a possible turning point for European manufacturing. Momentum in machinery, equipment, and technology suggests a broader recovery in investment, with the potential to signal an improvement in the industrial cycle.

Iran and Oman reached a preliminary understanding on the shipping route through the Strait of Hormuz, although Tehran clarified that the agreement does not imply its full reopening. Negotiations remain conditional on third-party participation (requiring approval from Supreme Leader Ali Khamenei) and U.S. restrictions, meaning uncertainty over a full normalization of maritime traffic persists.

Our Take The progress partially reduces the risk of a prolonged disruption but does not eliminate pressure on energy flows and maritime transportation. Moreover, it closely resembles the previous agreement, which ultimately failed due to renewed attacks on commercial vessels. The core issue remains the unpredictability of both Trump and the Iranian regime.

Corporate News

SanDisk and Western Digital issued revenue guidance for the next quarter that, while solid, fell short of the market's elevated expectations, reigniting concerns about the sustainability of the rally in memory chip stocks driven by AI demand. Both companies have posted strong gains during 2026, prompting investors to question how much of the expected growth has already been priced into their valuations.

Approximately $101 billion worth of SpaceX shares, equivalent to 912 million shares, will be released this Thursday in the first of nine scheduled lock-up expirations. The transaction will nearly double the company's public float and could put pressure on the stock price while also providing insight into which shareholders choose to take profits and which remain committed to the company.

Nintendo reported earnings above expectations, driven by U.S. tariff refunds and strong sales of exclusive titles for its new Switch 2 console, reinforcing the positive outlook for its video game business.

The To-do List

  • Watch for any sign that the agreement between Iran and Oman on the Strait of Hormuz receives approval from Supreme Leader Ali Khamenei.

  • Keep an eye on the Bank of Mexico's monetary policy announcement. All indications suggest it will leave the overnight rate unchanged.

  • Monitor the market's reaction to the $101 billion worth of SpaceX shares that become eligible for trading today.

  • Remember that today, August 6, Mexico celebrates National Beer Day, recognizing an industry that generates nearly 700,000 jobs across the country.

  • Tonight, make chipotle chicken wings with avocado crema, the perfect snack to celebrate National Beer Day.

Today's Quote...

"To live without taking risks is not to live." — Simone de Beauvoir