In the first half of August, consumer prices increased 0.10% every two weeks, bringing annual headline inflation to 3.26%, up from 3.14% in the second half of July. Core inflation increased 0.08% every two weeks and reached 3.93% annually, with increases in both merchandise (3.51%) and services (4.34%). Meanwhile, non-core inflation increased 0.18% every two weeks, although its annual rate moderated to 0.96%.

Our Take

The result reinforces the view that this year's inflation lows were likely reached last July and is consistent with our expectation of a gradual rebound during the remainder of 2026, so we maintain our forecast for inflation to end the year at around 4.0%.

Today, Monday, the United States will announce new economic sanctions against Iran and its trading partners, with the goal of intensifying pressure on Tehran. Around midday, Treasury Secretary Scott Bessent will provide more details on a strategy that, according to his previous statements, will be “the largest financial offensive ever organized against an adversary.”

Our Take

The greatest economic and market risk lies not in the direct impact on Iran's already weakened economy, but in the extraterritorial reach of the sanctions, particularly toward China. The new measures will add to the extensive existing sanctions regime covering the banking, energy, aviation, and cryptocurrency sectors.

The United States and Canada failed to reach a trade agreement on Friday, prompting President Donald Trump to announce new 50% tariffs on approximately $20 billion of Canadian exports. The measures affect around 5% of Canada's exports to the United States. Ottawa responded that it would impose reciprocal tariffs in retaliation, reigniting concerns about the impact of protectionism on global growth and corporate costs.

Our Take

This episode is the closest and most recent reference for how a serious trade dispute between the United States and a USMCA partner could evolve, precisely as Mexico goes through its own review of the agreement.

Corporate News

Alibaba raised HK$80 billion ($10.2 billion) in the largest secondary share offering in the history of the Hong Kong stock market, strengthening its ability to mobilize capital and accelerate its investments in artificial intelligence. However, its shares plunged more than 10% during the Asian session following the announcement amid concerns over dilution.

SoftBank plans to issue a record ¥1 trillion ($6.3 billion) in bonds to retail investors, the largest offering of its kind in Japan's history, with the goal of financing its investment commitments to OpenAI. The transaction illustrates the scale of capital that major technology companies and their financial partners are mobilizing to compete in artificial intelligence.

Shell is reportedly attracting interest from several potential buyers, including ExxonMobil and LyondellBasell, for its U.S. chemicals business, according to the Financial Times. The potential sale is part of the oil company's strategy to reduce its exposure to underperforming assets and improve the profitability of its portfolio.

The to-do list

  • Keep an eye on the sanctions the United States will announce against Iran today.

  • Follow developments in the U.S.-Canada trade war and any signals regarding how it could influence the USMCA review involving Mexico.

  • It's Monday, so start the week with some structure; define the two or three priorities for the next five days before the day's news cycle changes them.

  • Tonight, prepare pot beans with epazote, fresh cheese, and tostadas, one of the most comforting and simple staples of everyday Mexican cuisine.

  • Spend 30 minutes doing a strength or functional workout at home. Starting the week by moving your body sets the tone for everything that follows.

Quote of the day...

"It is not the strongest of the species that survives, but the one most adaptable to change."

— Charles Darwin