Bank of Mexico

• John McCain, the presumptive Republican presidential nominee takes third place following his impressive performance in a 'Civil Forum' at the Saddleback Church in Orange County, California.  Both McCain and rival candidate Barack Obama were interviewed by Rick Warren, the church's influential pastor.  Warren touched on contentious social issues, such as abortion and gay marriage, and economic concerns, such as the gap between rich and poor. Their responses were largely predictable, although McCain's explicit avowal that life begins "at conception" was an unusually clear articulation of his view on abortion. The forum was widely held to have been a victory for McCain; not only did he outperform Obama, but he was also able to use the occasion as an opportunity to unite his right-wing base.

• Syrian President Bashar al-Assad takes second place.  This week, Assad and his visiting Lebanese counterpart Michel Suleiman agreed that Syria and Lebanon should for the first time establish diplomatic ties and exchange ambassadors. Judging from the positive reactions from Western leaders, Assad has succeeded in selling his meeting with Suleiman as a turning point for Syrian policy towards Lebanon. In reality, none of the pledges made at the meeting fundamentally endanger Syria's control over its smaller neighbour.

• In first place, Bank of Mexico, the Mexican central bank, which for the third time in as many months has raised interest rates by 25 basis points to 8.25%. Banxico’s most recent inflation report, published on July 30, shocked markets with a marked increase in 2008-10 projected inflation.  The new, more realistic, forecasts not only strengthened the bank’s credibility with the markets but also prepared the ground for the most recent rate rise.  The move could lead to unwelcome currency appreciation as US investors look to take advantage of the high interest rate, but even this might have a positive effect, in helping to control domestic prices through cheaper imports.  Banxico has demonstrated its determination to arrest inflation, and its credibility has improved accordingly.