Recent disinflation in Mexico, with the July 2026 headline CPI easing to 3.12% year-over-year—the lowest since 2020—and core inflation declining to 3.95%, anchors trader sentiment toward the 3.50-3.99% range for the full-year average, which currently holds a 36.9% implied probability. This follows a sustained moderation from 3.94% in May and aligns with Banxico's 3% ±1% target band, though services prices remain elevated and the central bank has paused easing at a 6.50% policy rate while projecting 3% convergence only in 2027. Market-implied odds reflect uncertainty over potential rebounds from peso volatility, U.S. trade dynamics, or lingering core pressures versus further cooling in food and energy components. Key upcoming catalysts include the August CPI release and Banxico's next policy decision, which could shift probabilities if data deviates from the 3.0% near-term consensus forecast.