Colombia's central bank kept its benchmark interest rate unchanged at 12.0% on July 31st. The bank noted that annual inflation rose to 6.1% in June, driven by higher food and regulated prices, while core inflation held steady at 6.0%. Inflation expectations for end-2026 and 2027 increased to 6.6% and 5.0%, respectively, with market-based expectations remaining above 6.0%. The bank also noted that economic activity strengthened in the second quarter, supported by robust services sector growth, and maintained its 2026 GDP growth forecast at 2.5%. The unemployment rate fell to 8.0% in June. A stronger Colombian peso has helped ease inflationary pressures, but risks from the Middle East conflict and a potential El Niño event could fuel inflation and weigh on growth. Future policy decisions will remain data dependent.

Colombia Holds Interest Rate at 12.0%

Uruguay’s trade balance swung to a deficit of $71.7 million in June 2026 from a surplus of $274.8 million a year earlier. Imports surged 35.5% year-on-year to $1.18 billion, driven by a 57% increase in intermediate goods. Purchases of electricity soared 1,286.1%, while imports of oil and distillates jumped 407.7%. Meanwhile, consumer goods imports rose 13.2% and capital goods imports increased 12.7%. Exports fell 3.2% to $1.11 billion, as shipments of electricity, gas, and water plunged 87%. Exports of primary products also declined 14.8%, while manufactured goods exports increased 7.3%.

Uruguay Trade Balance Swings to Deficit in June

The start of August will see the war between Iran and the US continue to uphold the uncertainty in global energy prices, and consequently, the inflation outlook. This is in tandem with volatility in the AI trade, to be updated with results from SpaceX and AMD. A busy week of economic data will be headlined by the US jobs report and other labor data in the JOLTS and ADP report. ISM PMIs, factory orders, and the trade balance will also be featured for updates on industry and tariffs. In Europe, industrial production among the largest Eurozone states will unveil the impact of higher power costs, while Germany will post its trade balance. PMI results and the trade balance are awaited in China. Meanwhile, Japan will release wage data, and industry surveys are due in Australia. Interest rate decisions will take place in Brazil and India. Elsewhere, OPEC+ members will convene and discuss oil output quotas for the year.

Week Ahead - Aug 3rd

US equities rebounded on a choppy Friday amid more volatility for the AI infrastructure sector as markets considered the impact of higher long-term rates. The S&P 500, Dow, and Nasdaq 100 were around 0.4% up. Amazon surged 15% after beating expectations on its cloud-computing arm. Software and hyperscalers were also higher on reconsidered sentiment in the AI trade, with Alphabet gaining 6% while Microsoft and Meta rose nearly 3%. On the other hand, Apple tanked 10% as the shortage for chips raised costs and lowered production in the June quarter, denting earnings. Meanwhile, broader sectors also softened with Netflix and Eli Lilly losing 3% each. The 30-year Treasury yield surged further to 19-year highs on concerns that Kevin Warsh's FOMC could refrain from raising rates to fight inflation. Also, ExxonMobil sank 3% as limited refinery capacity prevented the oil giant form higher windfalls in oil profits last quarter.

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Colombia Holds Interest Rate at 12.0%

Uruguay Trade Balance Swings to Deficit in June

Week Ahead - Aug 3rd

US Stocks Rebound on Choppy Trading