The Citi Expectations Survey showed a moderate improvement in the outlook for Mexico. The consensus raised its 2026 growth forecast from 1.1% to 1.3% and kept its 2027 estimate unchanged at 1.8%. Headline inflation is expected at 4.0% at the end of this year and 3.8% next year, while Banxico’s policy rate is expected to remain at 6.50% throughout both periods.

Our Take The GDP upgrade reduces the risk of stagnation, but still points to an economy growing below its potential. At the same time, inflation running at the upper bound of Banxico’s target range justifies an extended pause. The combination of moderate growth and persistent price pressures leaves little room for additional rate cuts in the short term.

The Eurozone economy grew 0.6% quarter over quarter during the second quarter of 2026, above the initially estimated 0.4% increase, while annual growth stood at 1.2%. The result was supported by household consumption, which increased 0.4%, and by exports, which rose 3.4%, although investment declined 0.1%.

Our Take The data confirms that the eurozone weathered the energy shock better than expected, but the composition warrants caution. A significant share of growth came from the external sector and Ireland’s volatile performance, while investment remained weak. The improvement reduces the case for a more accommodative ECB stance, particularly following the recent rebound in inflation.

Industrial production in Germany fell 1.1% month over month in July, compared with the 0.1% increase expected by the market and after remaining unchanged in June. The decline was led by the automotive industry, where production fell 9.2%, partly reflecting adjustments at plants to manufacture electric vehicles.

Our Take The decline shows that the recent rebound in orders has yet to translate into a sustained recovery in production. Weakness in the automotive sector confirms the structural challenges facing German industry and increases the risk that the improvement in European GDP loses momentum during the third quarter.

Corporate news

Jaguar Land Rover announced plans to cut around 4,000 jobs, roughly 10% of its global workforce, as part of an effort to save £1.7 billion. The company is facing a combination of technological change, intense competition, and geopolitical uncertainty. The cuts follow similar announcements by BMW, Renault, and Volkswagen and reflect the pressure facing the European automotive industry from U.S. tariffs and growing Chinese competition.

Shares of Novartis fell 3.3% in Zurich after a potential flagship drug for heart disease failed in a late-stage trial, marking the company’s second clinical disappointment in a week. Meanwhile, Novo Nordisk halted two additional trials of its experimental heart disease treatment, once again weighing on its outlook.

China injected $45 billion into its major banks and insurers to strengthen the financial system and support lending amid the economic slowdown. The recapitalization will dilute existing shareholders, putting downward pressure on sector stocks: PICC fell 3.1%, China Reinsurance 3%, China Taiping 3.5%, and China Life 1.1% in Hong Kong.

Uber Technologies hired several banks to hold calls with investors this week ahead of its first euro-denominated bond issuance. The transaction is expected to include senior unsecured debt across multiple maturities and is aimed at diversifying its funding sources and tapping demand in Europe’s corporate debt market.

The “to-do list”

  • Follow developments in talks between Iran and Oman over the Strait of Hormuz, which Tehran says are "days" away from being finalized.

  • Keep an eye on the yen, which strengthened to its highest level since February against the dollar, surpassing the peak reached after the coordinated intervention by Japan and the United States.

  • Watch bitcoin, as a blockchain used by several cryptocurrency platforms was hacked for $320 million, adding to a string of recent thefts.

  • Remember that today marks another anniversary of Mexico’s first black-and-white television broadcast in 1946, using equipment designed by Mexican engineer Guillermo González Camarena.

  • Set aside 30 minutes for a long walk or an outdoor jog; starting the week by moving your body outside sets the tone for everything ahead.

Quote of the day…

"It is not the mountain we conquer, but ourselves."

— Edmund Hillary