The world faces the prospect of more expensive debt as bond yields climb to their highest levels in more than two decades
Japan, Europe, and the United States are recording record interest rates on long-term sovereign bonds amid persistent inflation, fiscal imbalances, and AI-related debt issuance.
Key points
Germany's economic sentiment improved in August, reinforcing the positive trend.
Trump adopts a hard-line stance toward Iran as tensions over the Strait of Hormuz continue.
New home construction in the United States declined in July.
At 7:15 a.m., the United States will release its industrial production report.
For the rest of the day, the interbank exchange rate (Mexican pesos per U.S. dollar) could trade between 16.98 and 17.08 in the spot market.
The combination of higher oil prices, rising sovereign bond yields, and renewed geopolitical risk continues to pressure major global stock markets. S&P 500 futures are down 0.5%, while Nasdaq 100 futures have fallen 1.3%, pointing to a third consecutive session of losses in an environment where the bond sell-off is reducing investors' appetite for risk assets. Oil prices approached $92 per barrel, their highest level in three weeks, after Trump ruled out reinstating the truce with Iran, increasing uncertainty surrounding the conflict in the Middle East and control of the Strait of Hormuz. WTI crude is up 0.4% at $84.82 per barrel. In fixed-income markets, pressure remains concentrated at the long end of the yield curve: the 30-year Treasury yield reached 5.33%, its highest level since 2007, while the 10-year Treasury yield rose by one basis point to 4.74%.
Monitor
Bolsas / Exchanges
S&P 500
7,732
-0.50%
Nasdaq
29,710
-1.30%
Dow Jones
53,492
-0.10%
IPyC
64,579
0.50%
Monedas / FX (Foreign Exchange)
USD/MXN
17.0452
0.10%
EUR/MXN
19.7154
-0.10%
EUR/USD
1.1574
0.00%
Índice DXY
99.64
0.00%
Tasas / Exchange Rates
Treasury 2 años
4.20
1.4 bp
Treasury 10 años
4.74
1.2 bp
TIIE 3 meses
6.58
2.0 bp
M Bono 10 años
9.17
-2.7 bp
Commodities / Commodity Markets
Petróleo (Brent)
91.14
0.30%
Oro
4,394
-0.50%
What you need to know about the economy and markets
Long-term bond yields have risen broadly, with the 30-year U.S. Treasury yield reaching 5.33%, its highest level since 2007. The move reflects a combination of higher inflationary risks driven by energy prices and geopolitical tensions, widening fiscal deficits, and increased debt issuance from both governments and corporations, particularly technology companies financing investments in artificial intelligence. This has been compounded by weaker structural demand from some institutional investors.
Our Take
For markets, the key question will be whether this move reflects a structural shift toward higher real interest rates and term premiums or whether it is being driven by temporary factors. In the meantime, higher volatility in global interest rates is expected, with potential spillover effects on equity markets and emerging-market currencies.
Germany's ZEW economic sentiment index for investors and analysts rose by 7.9 points in August to 34.2, following a 15.8-point increase in July. The reading significantly exceeded market expectations of 29.0 points and reached its highest level since February, before tensions in the Middle East began.
Our Take
The result reinforces the perception of a gradual recovery in the German economy, supported by public investment, exports, and improved corporate earnings.
President Donald Trump stated that he will not extend the 60-day truce with Iran, while threats toward Oman continue and no formal progress has been made in negotiations. Nearly six months after the conflict began, the ceasefire agreement reached on June 17 has deteriorated, and Washington and Tehran continue to hold opposing positions regarding the future of the Strait of Hormuz.
Our Take
By explicitly deciding not to revive the existing negotiation framework rather than simply allowing it to fade away, Trump is signaling that Washington has adopted, at least for now, a strategy of prolonged economic pressure instead of pursuing a short-term negotiated agreement.
U.S. housing starts fell 12.4% month over month in July to a seasonally adjusted annual rate of 1,239,000 units, following a 13.5% decline compared with the same month in 2025. Building permits, however, increased 5.0% month over month and 3.1% year over year to 1,443,000 units. Housing completions fell 9.1% month over month and 16.8% year over year to 1,212,000 units.
Our Take
The divergence between permits and housing starts suggests that builders are responding cautiously to financing and input costs, even as they anticipate some recovery in demand going forward.
Later today, the United States will release its July industrial production report. Market consensus expects monthly growth of 0.3%, above the 0.1% recorded in June. If confirmed, the data would indicate an acceleration in manufacturing and industrial activity.
Our Take
The report will be important in determining whether the industrial sector is maintaining the momentum observed during the summer, in an environment where AI-related investment continues to support economic activity. However, elevated energy costs and uncertainty stemming from the conflict in the Middle East will remain factors that could limit the sector's growth in the coming months.
Corporate News
Home Depot reported comparable sales growth of 1.7% during the quarter ended on August 2, above expectations and at its highest level since late 2022. Adjusted earnings also exceeded forecasts. The company maintained its full-year guidance, stating that it expects tariff reimbursements to partially offset unplanned fuel, energy, and other input costs.
BHP Group reported an increase in earnings of nearly one-third, driven by favorable commodity prices, with annual revenue from copper surpassing that of iron ore for the first time in the company's history.
Meta goes on trial today in a high-profile case against several state attorneys general over allegations that the company deliberately designed Facebook and Instagram to encourage compulsive use among younger users.
The to-do list
Review the industrial production report as an additional indicator of the health of the U.S. economy.
Closely monitor any further escalation in rhetoric between the United States, Iran, and Oman regarding control of the Strait of Hormuz.
Tonight, prepare stuffed poblano peppers with ground meat and roasted tomato sauce, a classic dish that requires patience but is well worth the effort.
Spend 30 minutes doing squats and deadlifts at home or at the gym, one of the best workouts for strengthening your legs and core.
Remember that today marks another anniversary of the enactment of Mexico's first Federal Labor Law in 1931.
Nahely Suasnavar nsuasnavara@kapital.com
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