The U.S. labor market surprised negatively in July, with a loss of 23,000 nonfarm jobs, mainly due to cuts in local government education, retail trade, and financial activities. In addition, payrolls for May and June were revised down by 103,000 jobs. Although the unemployment rate declined to 4.1%, this was due to lower labor force participation, while annual wage growth moderated from 3.4% to 3.2%.

Our Take

The combination of job losses, downward revisions in previous months, and a lower unemployment rate driven by reduced participation suggests that the U.S. labor market may be losing momentum. At the same time, the weak report reduces the likelihood of additional Fed tightening in the short term, including a potential rate hike in September.

The Bank of Mexico kept its overnight rate unchanged at 6.50%, with a unanimous decision by the Governing Board. The main adjustment in the statement was the revision of the timeline to reach the 3.0% inflation target, now expected in the fourth quarter of 2027, compared to the previously estimated second quarter. The central bank reiterated that maintaining the rate at its current level will be appropriate, reinforcing expectations of a prolonged pause in the easing cycle.

Our Take

The decision confirms that the Board prioritized caution despite improvements in recent inflation and activity data, placing greater weight on forward-looking risks than on the favorable current backdrop, particularly given persistent pressures in services. The delay in the convergence horizon to late 2027 appears appropriate and consistent with this prudent stance.

China’s exports grew 23.9% year-over-year in July, exceeding market expectations of a 22.2% increase. This was driven by global demand for high-tech components related to artificial intelligence, although it represents a moderation from June’s rapid pace (+27%). Imports rose 27.5% year-over-year, slightly below the expected 27.9% and also down from 36% in June.

The result confirms that external demand for Chinese goods remains strong, even as the extraordinary boost seen in June, linked to front-loading shipments ahead of potential tariffs and the semiconductor boom tied to AI infrastructure, begins to normalize.

Germany’s industrial production increased 0.2% month-over-month in June, exceeding the 0.1% consensus forecast and marking the third consecutive monthly increase. The rebound was mainly driven by the automotive industry, which rose 3.6% month-over-month, and by the “other transport equipment” segment, including aircraft, ships, and trains, which increased 8.4%.

The report confirms a gradual stabilization of German industrial activity. However, the recovery remains uneven, driven by the automotive and transport sectors, while machinery and energy-intensive industries continue to lag. This reflects that the German economy still faces high energy costs and weak external demand for capital goods.

Corporate News

Airbnb beat market expectations on both revenue and earnings and issued strong guidance for the next quarter. The report reinforces the view that spending on experiences and travel remains resilient despite moderating economic growth.

Cloudflare stood out in pre-market trading thanks to better-than-expected guidance, lifting the software and cloud infrastructure sector. The report suggests that demand for services linked to artificial intelligence and enterprise networks remains solid.

The Trade Desk disappointed with its outlook, triggering a significant correction in its stock. The market continues to penalize any signs of slowdown in companies with high valuations and strong exposure to artificial intelligence, as investors now demand sustainable growth and greater visibility on future earnings.

The To-do List

  • Follow developments in the Iran-Oman agreement on the Strait of Hormuz: Brent is easing toward $81, but uncertainty over maritime traffic persists.

  • It’s Friday, wrap up the week with no loose ends: have everything ready before 3 pm and head into the weekend with a clear inbox.

  • Tonight, make garlic shrimp tacos with guacamole, fresh, quick, and perfect to close an intense week with something light and flavorful.

  • Spend 20 minutes stretching or going for a walk; ending the week with movement makes a difference for the weekend.

Today’s Recommendation…

Remarkably Bright Creatures on Netflix, if you’ve read the book, we recommend the series, Emmy-nominated. A story that blends friendship, mystery, and magic with stunning cinematography from the very first scene.