Mexico’s economic activity loses momentum in August
Mexico’s economic activity, as measured by the IOAE timely indicator, is estimated to have grown 0.1% month over month in August, slowing from the 0.6% increase recorded a month earlier. On an annual basis, activity expanded 2.5%.
Key points
Mexico’s retail sales decline for a second consecutive month
Oil retreats on expectations of talks over the Strait of Hormuz
Trump addresses the UN General Assembly today
Bitcoin is back, but not as a safe haven
For the remainder of the day, the interbank exchange rate could trade within a spot range of MXN 17.xx–17.xx per dollar
Investors are renewing their interest in artificial intelligence-related companies as they await Donald Trump’s address to the UN later this morning and his meeting with Chinese President Xi Jinping, scheduled for later this week. Risk appetite is also being supported by the pullback in oil prices from their recent highs. Against this backdrop, US equity futures are mixed, with the S&P 500 up 0.1% and the Nasdaq 100 down by the same amount. Brent is back in negative territory and hovering around $98 per barrel amid signs of a potential diplomatic rapprochement between the United States and Iran. In fixed income, the 10-year Treasury yield is down 2 basis points to 4.94%.
Monitor
Bolsas / Exchanges
S&P 500
7,838
0.10%
Nasdaq
30,758
-0.10%
Dow Jones
52,678
0.40%
IPyC
63,817
0.40%
Monedas / FX (Foreign Exchange
USD/MXN
17.2453
0.20%
EUR/MXN
19.7464
0.10%
EUR/USD
1.1456
-0.10%
Índice DXY
100.46
0.00%
Tasas / Exchange Rates
Treasury 2 años
4.74
-1.0 bp
Treasury 10 años
4.94
-2.0 bp
TIIE 3 meses
6.6
10.0 bp
M Bono 10 años
9.38
0.1 bp
Commodities / Commodity Markets
Petróleo (Brent)
98.79
-1.50%
Oro
4,332
-0.30%
What you need to know about the economy and markets
Mexico’s Timely Indicator of Economic Activity estimates that the IGAE grew 2.5% year over year and just 0.14% month over month in August, based on seasonally adjusted data. Growth was broad-based, with secondary activities rising 2.7% year over year and 0.2% month over month, while tertiary activities increased 2.6% and 0.1%, respectively.
Our Take
The economy maintained broad-based growth in annual terms but lost momentum compared with the 0.6% monthly expansion estimated for July. The data point to a positive third quarter, although August’s marginal increase and the wide confidence intervals still warrant caution regarding the strength of the recovery.
Mexico’s retail salesdeclined 0.1% month over month in July but rose 2.0% year over year, based on seasonally adjusted data. In unadjusted terms, the largest gains were recorded in healthcare products, household goods and hardware, while sales declined at grocery stores, supermarkets and department stores, as well as at online-only retailers.
Our Take
Annual growth confirms that consumption retains some resilience, although the second consecutive monthly decline points to a loss of momentum at the start of the third quarter. Weakness in food sales and at supermarkets suggests caution in households’ day-to-day spending, meaning it is still too early to call this a solid recovery in retail activity.
Oil is falling to a two-week low on expectations of easing tensions in the Middle East. Iran said it could reopen the Strait of Hormuz within seven days if the United States reduces military pressure, while Saudi Arabia partially restarted its East-West pipeline and could resume exports from the port of Yanbu, bypassing the Strait of Hormuz.
Our Take
Both developments are temporarily reducing the geopolitical risk premium by improving the supply outlook and opening an alternative route for Saudi crude. A sustained decline in oil prices would ease inflationary pressures and downward pressure on bond prices. However, the move still depends on concrete progress in negotiations and an effective normalization of traffic through the Strait of Hormuz.
US President Donald Trump will address the UN General Assembly today, with his speech scheduled for around 8:00 a.m. Mexico City time, following remarks by Luiz Inácio Lula da Silva. He is expected to focus on the conflicts in the Middle East and Ukraine, energy security and the role of the United States in the international order.
Our Take
Attention will center on any signals regarding possible negotiations with Iran, the protection of the Strait of Hormuz and the US stance toward Russia and Ukraine. A conciliatory tone could ease pressure on oil prices, inflation and bond yields. Conversely, new threats or tougher conditions would increase the geopolitical risk premium and support the dollar and safe-haven assets.
Bitcoin returned to levels near $86,000, its highest price in eight months and a gain of more than 30% since mid-August. The rally has been driven by renewed inflows into exchange-traded funds, institutional buying, a sharp liquidation of short positions and improved risk appetite amid falling oil prices and bond yields.
Our Take
The recovery could extend if institutional flows persist and financial conditions ease, although the role of short covering and rising leverage increases the risk of a correction once that momentum fades.
Corporate news
Meta unveiled Muse, a personal artificial intelligence agent capable of sending emails, booking travel, negotiating bills and making purchases with the user’s authorization. The tool operates from a secure virtual machine and will integrate with platforms such as Shopify, although Amazon has already restricted its access over privacy and data-use concerns.
Alibaba unveiled the Zhenwu V900, which it describes as China’s most powerful artificial intelligence chip, delivering performance three times greater than its predecessor. Mass production is scheduled for early 2027 as the company seeks to reduce China’s dependence on US semiconductors.
Shares of On Holding rose as much as 5.1% in premarket trading after the Swiss athletic footwear brand said it expects sales growth in the high-double-digit range over the coming years as it introduces new products for golf and soccer in an effort to compete with Adidas and Nike.
The “to-do list”
Follow Trump’s address to the UN General Assembly and watch for any signals regarding a potential meeting with Iranian President Masoud Pezeshkian.
Monitor the decision by the governor of Texas, who suspended all permit applications from data centers pending completion of a risk assessment of the state’s power grid.
Complete 3 rounds of 12 wall push-ups, 20 standing cross-body knee-to-elbow crunches and 30 seconds of simulated jump rope. Rest for 20 seconds between exercises. Approximate duration: 7 minutes.
Remember that the 2026 autumnal equinox occurs today at 6:06 p.m. Central Mexico time.
Quote of the day…
“Safety and certainty in oil lie in variety and variety alone.”...Winston Churchill,
Alejandra Marcos amarcos@kapital.com
James Salazar jsalazars@kapital.com
Rodrigo Ventre Ruiz rventre@kapital.com
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