LatAm Trading Catalysts: Brazil and Mexico monetary policy; Brazil earnings season heavy calendar

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LatAm Trading Catalysts

Brazil and Mexico monetary policy; Brazil

earnings season heavy calendar

Investment Strategy

Economics: All eyes on monetary policy

02 August 2026

In Brazil (Wed), we expect the BCB to cut to 14.00% this week, and then we expect one

more cut to take Selic to 13.75% in September, before entering a prolonged pause (see

BZ Watch). In Mexico (Thu), we expect Banxico to remain on hold with the policy rate at

6.5%, and to remain on hold for the rest of the year even if the Fed hikes. Inflation data

in Mexico and Chile will be released on Friday. In the US, focus on payroll on Fri (Aug 7).

A firm print could force the Fed to reassert its inflation credibility (see Econ Weekly).

Investment Strategy

Latin America

Equity Strategy: Four ‘BZ Magnificent 7’ report this week

David Beker >>

Bz Econ/FI & LatAm EQ Strategy

Merrill Lynch (Brazil)

Four of the "Brazil Magnificent 7" report results this week. Raia Drogasil reports on Tue,

Mercado Libre on Wednesday (see Retail preview), Itaú on Tuesday (see Financials

preview) and Localiza on Thursday. Our Brazil Mag 7 quantitative screen looks for

growth, scale, and profitability. Our entire screen includes Mercado Libre, Nubank, WEG,

BTG Pactual, Raia Drogasil, Localiza, and Itaú. See methodology in Brazil’s Magnificent 7.

BZ earnings season: Banks, Petrobras, Axia in focus

Equity Strategy

Paula Andrea Soto, CFA >>

LatAm Equity Strategist

Merrill Lynch (Brazil)

Carlos Peyrelongue >>

Mex Eq Strat/Research Analyst

Merrill Lynch (Mexico)

Mateus Conceicao >>

LatAm Equity Strategist

Merrill Lynch (Brazil)

Two large banks will report this week. We expect broadly stable net income QoQ for Itaú

(Tue) on softer revenues, while Bradesco’s (Wed) earnings and ROE should improve on

stronger top-line trends, despite still-elevated provisions. More importantly, investors

may focus on management commentary on the conference calls amid concerns over a

new cycle of asset quality deterioration and elevated provisions in Brazil. In

commodities, we expect Petrobrás (Thu) to deliver a very strong EBITDA. Cash

generation and ordinary dividends should also come at appealing levels, yet partially

…