After briefly spiking in June, price increases have softened in July on cheap gas prices. Given that YTD inflation stands at under 1% yoy, we cut our year-end inflation forecast to 3% from 4%. Domestic activities continue to strengthen. The latest data on retail sales and auto sales affirm buoyant consumer confidence. Industrial production data and a strong PMI reading signal further improvement in manufacturing output. Meanwhile, the trade deficit continues to widen.