Mexico is considering expanding antidumping measures and increasing tariffs on selected products from China and other countries, with steel, vehicles, and auto parts among the sectors that could be affected. Although the Ministry of Economy has clarified that there is not yet a concrete proposal, the strategy appears aimed at strengthening the protection of Mexican manufacturing, reducing dependence on Chinese imports, and simultaneously aligning Mexico's trade policy more closely with U.S. demands within the context of the USMCA review.

Our Take

Higher barriers to Chinese products could benefit local producers and accelerate the relocation of supply chains, although they could also increase the cost of inputs and finished goods. For Mexico, the main strategic benefit would be strengthening its position with the United States and preserving favorable conditions within the USMCA.

According to Eurostat's final reading, the Eurozone's Consumer Price Index increased 0.2% month over month in July, in line with both the preliminary estimate and market expectations. On an annual basis, inflation accelerated to 2.9%, up from 2.8% in June and 2.0% a year earlier. Core inflation rose to 2.5% annually from 2.4% in June, although it remained unchanged on a monthly basis.

Our Take

The increase in core inflation, particularly in the services sector, suggests that underlying price pressures have not yet been fully contained. This limits the ECB's room to cut interest rates and reinforces the need to maintain a cautious, data-dependent approach.

In the United Kingdom, consumer prices increased 0.3% month over month in July, below the expected 0.4%. On an annual basis, inflation accelerated to 2.9%, up from 2.6% in June, reaching its highest level in four months and matching market expectations. The main drivers were housing and household services, particularly gas and electricity, while transportation helped offset some of the increase. Core inflation remained at 2.6% year over year for the third consecutive month.

Our Take

The key message from the data is that the threshold for the Bank of England to raise rates again remains high. Our baseline scenario assumes that the central bank will keep interest rates unchanged for the remainder of the year before resuming rate cuts in the spring of 2027.

U.S. President Donald Trump announced a three-day suspension of the 50% tariffs on Canadian imports that were scheduled to take effect this Wednesday after reaching a preliminary agreement with Canada. The measures would have affected products such as hockey sticks, wine, and other Canadian goods. The tariffs were announced last month in response to what the Trump administration described as discriminatory Canadian trade practices in sectors including automobiles, alcohol, and dairy products.

Our Take

Despite ongoing uncertainty, the announcement signals progress in the tense relationship between two major trading partners that exchanged nearly $900 billion in trade last year. It also suggests the possibility of advancing the ongoing review of the North American trade agreement, which also includes Mexico.

Corporate News

Target doubled its net profit in the second quarter of 2026 to $1.877 billion, up from $935 million a year earlier, and raised its full-year guidance. The company now expects earnings per share between $9.90 and $10.90, including tariff reimbursements ($8.25 to $9.25 excluding them, compared with the previous range of $7.50 to $8.50), along with net sales growth of around 5%, one percentage point above its previous forecast.

SK Hynix announced a share repurchase and cancellation program worth 40 trillion won (approximately $29 billion), seeking to reassure investors amid concerns about the sustainability of spending on artificial intelligence. The program will be carried out between August 20 and November 19. The company also increased its total shareholder return target to more than 50% of cumulative free cash flow, leaving the door open to special dividends.

Alphabet completed its first bond issuance in Australian dollars, joining the wave of technology companies raising debt to finance AI infrastructure. The company raised AUD 5.5 billion ($3.89 billion) through 3-, 5-, 10-, and 20-year bonds, with a 6.9% coupon on the longest-term bonds, representing its highest financing cost to date.

Unitree Robotics debuted on the Shanghai Stock Exchange as the first humanoid robot manufacturer to be publicly listed in mainland China. Its shares closed 460% higher after rising nearly 630% during the trading session. The company raised approximately $905 million through its initial public offering.

The to-do list

  • Keep an eye on the Fed minutes at 12:00 p.m. The market will be looking for details regarding the three dissenting votes in favor of a rate hike in July and any signals regarding the threshold that could trigger action in September.

  • Follow the $16 billion auction of 20-year Treasury bonds. Demand will be a key indicator of the market's appetite for debt.

  • Tonight, prepare an Aztec soup with tortilla strips, pasilla chili, cream, and cheese, one of the most comforting dishes in Mexican cuisine and perfect for the middle of the week.

  • Dedicate 30 minutes to a circuit of burpees and planks, requiring no equipment and suitable for any space at home.

Quote of the day...

"Knowledge is power." — Francis Bacon