Morning View

In the U.S., 2nd quarter GDP grew +2.8% annualized, well above the expected +2%.

International

In the United States, the Gross Domestic Product (GDP) for the 2nd quarter grew at an annualized rate of +2.8%, according to the first of three estimates. This performance was substantially higher than the +2% estimated by the analysts' consensus and the +1.4% recorded in the first quarter of the year. Driven by an increase in consumption and investment, activity remains solid.

In this context, U.S. Treasury yields traded mixed across all maturities at yesterday's close. While the 1-year bond yield remained unchanged at 4.84%, the 3-year ended at 4.25% and the 10-year yield compressed to 4.25%. 

Meanwhile, the main U.S. stock indexes closed with declines in most cases during yesterday's trading session, with the exception of the Dow Jones, which rose +0.2%. Meanwhile, the Nasdaq contracted -0.9%, followed at a slower pace by the S&P 500 with -0.3%. However, for the year the indices accumulated increases of +6%, +14.5% and +13.5%, respectively.

The day's attention in the United States will be focused on the release of the Personal Consumption Expenditure (PCE) price index -the Federal Reserve's (Fed) benchmark for monetary policy decisions- for June, with expectations of +2.4% year-over-year increases and +2.5% in the measurement without food and fuel. Meanwhile, companies will continue to report their Q2 results.

Latam

Brazil's inflation rate reached +4.5% year-on-year in the first half of July, slightly above expectations

Brazil's consumer price index rose +4.5% y-o-y in the first half of July, accelerating from the previous record of +4.1%. At the same time, it was above the market forecast of +4.4%. Compared to the previous fortnight, the increase in prices was +0.3% versus analysts' consensus of +0.2%.

The main equity indices of Latin American countries, for the most part, presented negative performances at Thursday's close. Chile's market recorded its second consecutive decline, with a -1.0% variation. Meanwhile, Mexico and Brazil continued with the negative trend with declines of -0.5% and -0.3% in each case. Finally, Peru was the exception in the region, with an increase of +0.2%.

U.S. Treasury yields traded mixed, with the 10-year at 4.29%

International

US Treasury bond yields showed a mixed trend yesterday, compressing in the short maturities and widening in the long end of the curve, while awaiting the release of the 2nd quarter Gross Domestic Product, for which an annualized increase of +2% is expected. Thus, the 1-year bond yield ended at 4.84%, the 3-year bond yield was 4.26%, while the 10-year bond yield rose to 4.29%. 

In the United States, the July manufacturing Purchasing Managers' Index (PMI) came in at 49.5 points, lower than in June and below the 51.7 points estimated by the analysts' consensus. Likewise, in the Eurozone, the PMI registered 45.6 points, below the performance of the previous month and below expectations (46 points). It is worth remembering that a reading above 50 points denotes expansion, and a reading below 50 points denotes contraction of activity.

The main U.S. stock indexes closed yesterday's trading session with widespread declines, mainly affected by the poor Q2 results of technology companies. The Nasdaq had the sharpest decline of the year, with -3.6%, followed by the S&P 500 with -2.2% and the Dow Jones with -1.2%. Nevertheless, it should be noted that during the year the indexes accumulated increases of +15.5%, +13.9% and +5.7%, respectively.

Regarding the corporate results season, IBM reported revenues and earnings per share (EPS) above expectations. Meanwhile, AT&T reported EPS in line with expectations but revenues below projections; while Deutsche Bank did not beat EPS and revenue estimates. During the day, the balance sheets of AbbVie, Nestlé, Roche Holding, AstraZeneca and Unilever, among others, will be released. 

Latam

Mexico's inflation rate reached +5.6% year-on-year in the first two weeks of July, above expectations

Mexico's consumer price index rose +5.6% year-over-year in the first half of July, accelerating from the previous record of +5.2%. At the same time, it exceeded market forecasts of a +5.4% increase. Compared to the previous fortnight, the increase was +0.7% versus analysts' consensus of +0.5%.

Major Latin American markets traded lower at the close on Wednesday, in line with developed markets. Mexico's stock index led the declines with a variation of -1.0%. Meanwhile, Peru and Chile followed the region's negative trend with declines of -0.4% and -0.6% in each case. Finally, Brazil showed practically no movement.

During the day, Brazil's mid-month inflation for July will be published, where analysts' expectations are for a +4.4% y-o-y increase.