Overview

• INEGI reported a 3.49% annual rate for the first half of August, below market projections, with a 0.02% decline from the prior quincena.
• Core inflation held at 4.21% year over year, with merchandise at 3.97% and services at 4.43%, signaling persistent underlying pressures.
• The non-core index fell 0.41% over the quincena and rose 1.10% annually, helped by cheaper fruits and vegetables and extended merchandise discounting noted by Banamex.
• The reading marks a third consecutive quincena within Banxico’s 3% ±1 percentage point target after a 25 bp policy-rate cut to 7.75% on August 7.
• President Claudia Sheinbaum welcomed the data and pointed to record foreign direct investment this year and wage gains as evidence of economic strength.