China recorded lower inflationary pressure in July
Moderation in consumer and producer prices in China points to limited inflationary pressures and leaves room for demand-supporting measures.
Key points
Eurozone investor confidence rises for a fourth consecutive month and turns positive in August
Japan posts a current account deficit in June for the first time in 17 months
Trump shifts tone on Iran: from military threat to economic pressure
For the remainder of the day, the interbank exchange rate (pesos per dollar) could trade between $17.10 - $17.20 spot
U.S. equity futures are trading slightly lower this Monday after indices posted their strongest week since April, remaining near highs with optimism largely intact. The market continues to digest the weak U.S. employment report and is watching key catalysts for upcoming sessions, including developments in the Strait of Hormuz and the release of U.S. inflation data on Wednesday. In this context, both the S&P 500 and the Nasdaq 100 are down around -0.1%. In commodities, Brent crude rises 1.9% to above $85.17 per barrel, while WTI gains 1.4% to $79.27, after Iran and Oman ended the weekend without reaching an agreement to reopen the Strait of Hormuz and Houthi militants claimed responsibility for an attack on a Saudi refinery near the Red Sea. In fixed income, the U.S. 10-year Treasury yield increases 2 basis points to 4.67%.
Monitor
Bolsas / Exchanges
S&P 500
7,774
-0.10%
Nasdaq
29,801
-0.10%
Dow Jones
54,041
-0.20%
IPyC
67,173
0.40%
Monedas / FX (Foreign Exchange)
USD/MXN
17.1513
0.20%
EUR/MXN
19.8104
0.00%
EUR/USD
1.1547
-0.10%
Índice DXY
99.77
0.20%
Tasas / Exchange Rates
Treasury 2 años
4.23
2.4 bp
Treasury 10 años
4.67
1.6 bp
TIIE 3 meses
6.58
2.0 bp
M Bono 10 años
9.11
-1.0 bp
Commodities / Commodity Markets
Petróleo (Brent)
85.17
1.90%
Oro
4,331
-0.20%
What you need to know about the economy and markets
China’s annual inflation slowed to 0.5% in July 2026, down from 1.0% in June, below expectations of 0.8% and marking its lowest level since January. The moderation was mainly driven by lower non-food inflation, which declined from 1.5% to 0.9%. Meanwhile, producer prices (PPI) rose 3.5% year-over-year, compared to 4.1% in June and below the expected 3.8%. The slowdown in PPI was linked to weaker growth in production material costs, which fell from 5.5% to 4.8%. On a monthly basis, CPI declined 0.1%, while PPI fell 0.7%.
Our Take
The continued absence of significant inflationary pressures leaves room for additional stimulus measures (both fiscal and monetary) aimed at strengthening demand, particularly given the weakness in domestic consumption.
Investor confidence in the eurozone continued to improve in August. The Sentix index rose for the fourth consecutive month, increasing 4 points to 0.9, returning to positive territory and reaching its highest level since February. The improvement was particularly notable in the current conditions component, which increased from -14.8 to -8 points, while expectations rose slightly to 10.3 points.
Our Take
The recovery in Sentix points to a gradual improvement in perceptions of the European economy. If sustained, it could support investment and domestic demand; however, the still-negative current assessment suggests that optimism has yet to fully translate into activity.
Japan recorded a current account deficit in June for the first time in 17 months, reflecting mainly seasonal factors and a lower contribution from external trade. The deficit amounted to $584.5 million. Financial markets will continue to monitor developments in exports and the yen, as well as the impact of global trade conditions on the external sector.
Our Take
The data breaks a prolonged streak of surpluses, although it does not necessarily signal a structural deterioration in Japan’s external position, given the importance of investment income.
The U.S. president stated that he prefers to let economic pressure on Iran build rather than launch new attacks, marking a shift from his repeated threats to escalate the bombing campaign, and described the U.S. stance on the Strait of Hormuz as one of “semi-negotiation.” Iranian Foreign Minister Araghchi said an agreement with Oman is “very close,” although he ruled out direct talks with the U.S. for now, citing violations of the interim peace agreement reached in June. Meanwhile, Houthi militants claimed responsibility for an attack on a Saudi refinery near the Red Sea.
Our Take
A shift toward sustained economic pressure (rather than military escalation) could, at the margin, reduce the risk of extreme spikes in Brent prices like those seen in July, but it does not eliminate the underlying uncertainty, as a satisfactory resolution for both parties still appears distant.
Corporate News
TSMC reported 45% year-over-year growth in its monthly sales, reinforcing signs of strong demand for semiconductors linked to artificial intelligence. The result confirms that spending on AI infrastructure continues to support the technology supply chain, from processors to memory and manufacturing equipment. This strength suggests that, despite elevated sector valuations, the expansion in computing demand remains fundamentally supported, although the market will continue to monitor the sustainability of this pace of investment.
Berkshire Hathaway spent approximately $4.5 billion on share buybacks during the second quarter and purchased nearly $20 billion in shares of other companies, representing the largest quarterly shareholder payout since 2021. Shares were up 0.8% in pre-market trading.
Meta Platforms introduced a new artificial intelligence model light enough to run on a single computer, allowing users to download and customize it. The new Muse Glimmer is a distilled version of the company’s Muse Spark 1.2 model, designed to minimize system requirements. Developing AI models and tools capable of attracting users amid competition will be key to consolidating the company’s business in the long term.
The To-do List
Monitor oil throughout the day: Iran and Oman ended the weekend without an agreement on the Strait of Hormuz, and Houthi forces attacked a Saudi refinery near the Red Sea.
It’s Monday—start the week organized: define the two or three key priorities for the next five days before news flow shifts your focus.
Tonight, make enfrijoladas with cheese and cream—one of the most comforting and quick dishes in Mexican cuisine to kick off the week.
Spend 30 minutes on a functional workout or weights at home; starting the week with movement sets the tone for everything ahead.
Today’s Quote…
“There is no elevator to success—you have to take the stairs.”
— Zig Ziglar
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Guillermo Quechol gquechol@kapital.com
Nahely Suasnavar nsuasnavara@kapital.com
Important Notice: This document is confidential and intended solely for the use of clients and prospective clients of Kapital México Grupo Financiero (“Kapital”). The opinions contained herein reflect exclusively the views of the analysts as of the date of preparation, and such analysts do not receive any compensation from persons other than Kapital. Kapital hereby declares the following:
Kapital does not hold investments in the securities covered by this analytical report that represent one percent (1%) or more of its securities portfolio.
Analysts may hold investments in certain issuers whose securities are the subject matter of this Analytical Report.
No member of the Board of Directors, Chief Executive Officer, or senior officer of Kapital or of the entities comprising Kapital, occupying positions immediately below such level, holds any relevant position in the issuers of the securities covered by this analytical report.
During the past twelve months, where applicable, there have been changes in the direction of the opinions expressed in the analytical reports regarding the issuers covered by this analytical report, in accordance with prevailing economic, political, and social market conditions.
The contents of this document are provided for informational purposes only and do not constitute an offer or investment recommendation. Kapital assumes no liability for decisions made based on this information. Past performance does not guarantee future results.
