China's economy showed a broad-based slowdown in July, with both industrial production and retail sales losing momentum, while fixed-asset investment extended its decline and the urban unemployment rate increased. Industrial production expanded by 4.5% year over year, down from 5.3% in June, while retail sales rose just 0.6%, compared with 1.0% in the previous month and well below analysts' expectations of 1.5%.

Our Take

Overall, July's data point to a loss of momentum in China's economy at the beginning of Q3 2026, suggesting that domestic demand remains one of the country's main weaknesses, despite the resilience shown by certain consumption segments and manufacturing industries.

Japan's GDP grew 0.3% in the second quarter of 2026 compared with the previous quarter, slowing from the 0.5% recorded in the first quarter and falling short of the 0.5% expected by market consensus. On an annualized basis, growth reached 1.1%, significantly below both the expected 2.0% and the previous quarter's 1.9%. Domestic demand subtracted 0.2 percentage points from growth, affected by private consumption, which declined 0.02% quarter over quarter, marking its first contraction in eight quarters.

Our Take

Markets continue to expect an interest rate hike at the September or October meeting, although today's data increase the risk that the Bank of Japan may choose to wait, which would maintain the interest rate differential that supports carry trade strategies and limit the strengthening of the yen in the short term.

The weekend brought little encouraging news from the Middle East. As the temporary ceasefire between the United States and Iran expired, Israel launched attacks in Lebanon while Washington prepared new sanctions to pressure Tehran into returning to the negotiating table. Meanwhile, Iran adopted a more aggressive stance, with its foreign minister stating that the country has not yet decided whether to resume talks with the United States, suggesting that a diplomatic resolution remains unlikely in the near term.

Our Take

Negotiations to reopen the Strait of Hormuz have shown limited progress, although crude shipments through the waterway have been reported, and discussions between Iran and Oman appear to be advancing without U.S. involvement.

Corporate News

Anthropic, the developer behind the Claude model, reported preliminary revenue of more than $11.5 billion in the second quarter of 2026 to potential investors, representing a more than 14-fold increase compared with the $787 million reported during the same period in 2025 and more than double the $4.73 billion reported in the first quarter. The company also reported positive adjusted operating income for the first time. The figures were released as Anthropic continues preparations for a potential initial public offering.

AstraZeneca halted a clinical trial for its experimental drug volrustomig after it failed to outperform existing lung cancer treatments. However, the company's shares rose 2% in London following positive late-stage clinical trial results for two other drugs in its portfolio.

BlueScope Steel's profits surged, driven in part by a boom in data center construction that boosted sales in its North American division. The fact that the rapid expansion of data center construction is already having a measurable impact on a steel producer's sales provides additional confirmation that investment in physical AI infrastructure is translating into real demand for construction materials.

The to-do list

  • Monitor the evolution of the fighting between Israel and Hezbollah and its impact on Brent crude, which is once again approaching $90 per barrel.

  • Review U.S. retail sector earnings this week: Home Depot on Tuesday, Target and Lowe's on Wednesday, and Walmart on Thursday.

  • Spend 30 minutes on a stationary bike or a spinning session at home. Starting the week with cardio sets the tone for everything that follows.

  • Today, Mexico celebrates National Veterinarian Day, established in honor of the founding in 1853 of the country's first veterinary school and the first in the Americas.

Quote of the day...

"The only way to do great work is to deeply love what you do."

— Confucius