Welcome to our monthly newsletter which covers key developments in major non-US markets. With this newsletter, we highlight corporate, debt, and monetary policy news in European, Asian, and Latin American markets. We end this piece with a spotlight on commodities.
European Markets
Corporate and Business News
- The U.S. and EU agreed on a trade framework that would lower U.S. auto tariffs from 27.5% to 15%, contingent on EU measures to drop tariffs on U.S. industrial and agricultural goods, along with ambitious mutual investment pledges effectively reshaping transatlantic trade dynamics.
- Flash PMI data in August revealed the Eurozone composite index surged to 51.1, the highest since May 2024, spurred by expanding manufacturing and services growth, bolstering ECB expectations for steady interest rates.
- Through July 2025, European ETFs attracted an all‑time high of $207 billion, surging over 60% year‑over‑year, driven by retail investor demand, led by iShares and Amundi, marking a notable shift in investment sentiment toward regional equities.
- On August 21st, British retailer WH Smith plummeted ~40 % after revealing a £30 million accounting error tied to early income recognition in North America, triggering a profit outlook downgrade and independent audit response, rattling investor confidence.
- Zurich’s CEO warned that U.S. private capital firms like Apollo and KKR may face regulatory and structural challenges entering Europe’s insurance sector, citing mismatched investment timelines, as the company also advances a $20 billion portfolio sale.
- Amid geopolitical and market uncertainty, American investors injected over $15 billion into UK equities in 2025 YTD, fueling record highs for FTSE indices, particularly in financials, defense, utilities, and AI, and showing renewed confidence in the UK as an investment haven.
Debt and Monetary Policy News
- At July’s meeting, the ECB held its main interest rates steady—deposit rate at 2.00%, main refinancing at 2.15%, and marginal lending at 2.40%—halting what had been a year‑long cycle of easing. The move, accompanied by a cautious but slightly optimistic outlook on growth and inflation, dampened immediate expectations for further cuts, marking a key inflection point for bond markets.
- ECB President Lagarde stressed a “data‑dependent, meeting‑by‑meeting” approach to monetary policy amid global trade uncertainties. Market expectations for a further rate cut in September dropped significantly, with probabilities reflecting that the next easing may now be unlikely unless inflation data softens.
- UK inflation rose to 3.8%, driven by higher food, energy, and regulated prices, marking the highest rate since early 2024. Despite this, the Bank of England cut interest rates to 4%, anticipating that inflation will peak soon and then decline. However, the Bank warned that persistent inflation and wage pressures could slow or delay future rate cuts.
- In June, foreign investors purchased €59.8 billion of euro‑zone government debt with maturities of at least one year, supporting bond demand and yields—though the pace moderated from May’s record highs. This sustained inflow underpinned overall fixed‑income market stability and reinforced demand for sovereign bonds.
- A notable convergence occurred between Italian and French sovereign bond yields as Italy’s fiscal outlook improved thanks to political stability and tighter deficit control, while France grappled with rising borrowing costs due to higher welfare spending and a fragmented political environment. The narrowing spread reflect evolving perceptions of fiscal risk across major euro‑area issuers.
Asian Markets
Corporate and Business News
- Japan’s economy grew much faster than expected in the second quarter despite new U.S. tariffs, giving the central bank some of the conditions it needs to resume interest rate hikes this year. GDP rose 1.0% on an annualized basis, government data showed. However, Japanese exports dropped 2.6% year-on-year in July, down for a third straight month, largely driven by weaker demand from China and sluggish global semiconductor shipments.
- Shares in SoftBank Group jumped more than 13% to a record high in a show of investor support for the Japanese technology investor’s AI push after its first-quarter profit beat expectations. The company’s AI investments include a $30 billion commitment to OpenAI and leadership in financing Stargate, a $500 billion U.S. data center project.
- China’s exports of rare earth magnets recovered to hit a six-month high in July, showing trade flows of the critical minerals key to electric vehicles have returned to levels seen before Beijing imposed export curbs.
- Toyota, the world’s largest carmaker, revised its profit forecast downward due to the impact of new U.S. tariffs. The company is also reintroducing electric vehicles in Thailand and launching low-cost hybrids to stay competitive in Southeast Asia.
- Property investment in China declined 12% in the first seven months of the year from the same period last year, after dropping 11.2% in the first half. Property sales by floor area fell 4.0% year-on-year, compared with a 3.5% drop in the first six months of the year. The data represents a deepening crisis in the real estate sector despite government efforts to stabilize the market.
- The Asian Development Bank will fund upgrades to part of Pakistan’s creaking railway system, replacing China, after prolonged delays in securing financing from Beijing threatened to put a strain on a strategic mining project.
- Brazilian subsidiary of China’s ride-hailing company DiDi Global sued Chinese rival Keeta on Monday in a Sao Paulo court, alleging trademark infringement and unfair competition, according to court documents
Debt and Monetary Policy News
- Japan’s core inflation slowed for a second straight month in July but stayed above the central bank’s 2% target, keeping alive market expectations for another interest rate hike in the coming months. The nationwide core consumer price index rose 3.1% in July from a year earlier.
- Japan’s Ministry of Finance is preparing to ramp up the interest rate it factors in for long-term government bonds to the highest level in 17 years as it gathers other ministries’ budget requests for fiscal year 2026/27.
- Japanese investors sold foreign stocks for a third straight month in July, taking profits after a steep rally left valuations stretched, while channeling large sums into higher-yielding foreign bonds as a weakened yen boosted returns.
- Bearish bets on China’s yuan hit their highest since mid-May, with analysts turning short for the first time amid mounting concerns over the economy. China’s economy lost steam in July, with retail sales rising just 3.7% year-on-year, well below the 5.9% growth.
- China is expected to keep benchmark lending rates unchanged for the third straight month in August this week despite a string of recent economic data suggesting the economy might lose some momentum.
Latin American Markets
Corporate and Business News
- Mercado Libre reported a record-breaking second quarter, with $6.8 billion in revenue and $825 million in operating income, driven by a 36% year-over-year increase in items sold in Mexico—the fastest pace in nearly two years. The company’s fintech arm, Mercado Pago, also saw strong growth, reaching 68 million monthly active users and expanding its credit portfolio by 91%.
- GE Appliances (owned by Haier) announced a $3 billion investment to expand operations in the U.S., effectively shifting production away from Mexico. This move could impact Mexico’s manufacturing sector and labor market.
- Peru’s gold exports to China surged in the first half of 2025 to surpass shipments from all of last year, according to government data released in August. This sharp increase highlights China’s growing demand for gold amid economic uncertainty and efforts to diversify its reserves.
- Brazil’s President Luiz Inacio Lula da Silva on Tuesday said his government would provide $5.55 billion in credit as part of a plan to support companies that export goods and are affected by steeper tariffs imposed by Washington.
- Brazilian power company Eletrobras has partnered with C3 AI to apply artificial intelligence to help operate the electric power transmission network in Latin America’s largest economy. The collaboration aims to improve grid reliability, optimize energy distribution, and reduce operational costs through predictive analytics and real-time monitoring.
- Banco do Brasil is facing the highest default level ever recorded in its agribusiness loan portfolio, CEO Tarciana Medeiros said, adding that the deterioration had not been anticipated even in the most pessimistic forecasts. This surge in defaults could have ripple effects across Brazil’s agricultural sector, potentially tightening credit conditions and impacting food production and exports.
- Brazil’s consumer coffee prices fell 1.01% in July, the first drop in 18 months, according to data from the country’s Broad National Consumer Price Index (IPCA). This drop followed a decrease in prices paid to farmers after the 2025 harvest and occurred amid global market volatility, including concerns over new U.S. tariffs on Brazilian goods like coffee.
- Chilean copper miner Codelco will lower its 2025 production guidance after an accident at its flagship El Teniente mine knocked 33,000 metric tons off the facility’s output. El Teniente is now forecast to produce 316,000 tons this year.
Debt and Monetary Policy News
- Mercado Libre reported a record-breaking second quarter, with $6.8 billion in revenue and $825 million in operating income, driven by a 36% year-over-year increase in items sold in Mexico—the fastest pace in nearly two years. The company’s fintech arm, Mercado Pago, also saw strong growth, reaching 68 million monthly active users and expanding its credit portfolio by 91%.
- GE Appliances (owned by Haier) announced a $3 billion investment to expand operations in the U.S., effectively shifting production away from Mexico. This move could impact Mexico’s manufacturing sector and labor market.
- Peru’s gold exports to China surged in the first half of 2025 to surpass shipments from all of last year, according to government data released in August. This sharp increase highlights China’s growing demand for gold amid economic uncertainty and efforts to diversify its reserves.
- Brazil’s President Luiz Inacio Lula da Silva on Tuesday said his government would provide $5.55 billion in credit as part of a plan to support companies that export goods and are affected by steeper tariffs imposed by Washington.
- Brazilian power company Eletrobras has partnered with C3 AI to apply artificial intelligence to help operate the electric power transmission network in Latin America’s largest economy. The collaboration aims to improve grid reliability, optimize energy distribution, and reduce operational costs through predictive analytics and real-time monitoring.
- Banco do Brasil is facing the highest default level ever recorded in its agribusiness loan portfolio, CEO Tarciana Medeiros said, adding that the deterioration had not been anticipated even in the most pessimistic forecasts. This surge in defaults could have ripple effects across Brazil’s agricultural sector, potentially tightening credit conditions and impacting food production and exports.
- Brazil’s consumer coffee prices fell 1.01% in July, the first drop in 18 months, according to data from the country’s Broad National Consumer Price Index (IPCA). This drop followed a decrease in prices paid to farmers after the 2025 harvest and occurred amid global market volatility, including concerns over new U.S. tariffs on Brazilian goods like coffee.
- Chilean copper miner Codelco will lower its 2025 production guidance after an accident at its flagship El Teniente mine knocked 33,000 metric tons off the facility’s output. El Teniente is now forecast to produce 316,000 tons this year.
Debt and Monetary Policy News
- The Bank of Mexico cut its benchmark interest rate by 25 basis points to 7.75%, the lowest level in three years, in response to slowing economic growth and easing inflation. The central bank also downgraded its GDP growth forecast for 2025 to just 0.1%, citing weak domestic activity and risks from U.S. trade policies. Despite the economic challenges, Banxico emphasized that it does not expect a recession and will continue to monitor inflation and investment trends closely.
- Brazil’s central bank is still assessing whether the benchmark interest rate at 15% is appropriate to bring inflation down to its 3% target. In late July, policymakers kept rates unchanged at a near 20-year high after 450 basis points in hikes since last September. Consumer prices in Latin America’s largest economy rose 0.26% in July, ticking up from 0.24% in the prior month but below the 0.37% increase forecast.
- Brazil’s economic activity contracted in June, central bank data showed, reinforcing signs of a slowdown under the weight of high borrowing costs. The IBC-Br index, a proxy for gross domestic product, fell 0.1% in June from May on a seasonally adjusted basis.
- Consumer prices in Chile rose more than expected in July, data from the statistics agency INE showed, triggering questions about the likelihood of the central bank delivering fresh interest rate cuts in the very near term. The annual inflation rate hit 4.3%, the agency added, up from 4.1% in the previous month and the central bank’s target range of 2% to 4%.
- The Cuban peso traded on the informal market at an all-time low of 400 to the dollar, as the partial dollarization of the state-dominated economy gained momentum, stoking social tensions amid scarcity of basic goods, runaway inflation, and deteriorating infrastructure and public services.
Commodities Spotlight
Inventory hits 3-year low, Production keeps up
Source: Fundamental Analytics
NYMEX WTI crude slipped from late-July highs near $70 to around $62 by mid-August, pressured by rising U.S. shale production and OPEC+ output growth, which outweighed strong inventory draws. U.S. crude stocks declined sharply, with distillate inventories tightening, signaling resilient demand. However, elevated exports and higher imports reinforced oversupply risks. Geopolitical uncertainty—including ongoing Ukraine conflict, Russian supply sanctions, and renewed U.S. tariff threats—added volatility, preventing deeper declines. Overall, fundamentals pointed to a looser supply balance, but geopolitics provided a price floor, keeping WTI range-bound in the low-$60s despite bearish market sentiment.
Wheat exports weakened, Prices touched 1-year low
Source: Fundamental Analytics
CBOT December wheat fell by roughly 7.6% month-over-month, pressured by ample global supplies, improving U.S. crop conditions, and slowing export demand, especially from the EU amid rising internal production and tighter import quotas. Ukrainian export volumes remained constrained but may recover as harvest improves. Structural challenges in Black Sea logistics and export sanctions limited upside, while solid domestic supply and weaker European import demand weighed on the December contract.
