Written Commentary
ADM Exceeds 5M Regenerative Agriculture Acreage Gal
September 9, 2025
Modest run of data to focus on US Manufacturing ISM, digesting UK BRC Retail Sales, Australia Current Account, Korean, Swiss and Turkish inflation; Brazil and South Africa Q2 GDP ahead; smattering of ECB speakers; German, Austrian and Japan bond auctions
UK: warm weather boost to BRC Sales does not disguise weak underlying trend
Australia: run of weak Q2 GDP components continues, but strong government spending to offset, small downside risk to headline GDP
US Manufacturing ISM expected to edge up but remain in contraction, PMI seen shaded higher from flash reading
EVENTS PREVIEW
The US Manufacturing ISM headlines a relatively modest calendar of data, which has UK BRC Retail Sales, Australia’s Current Account (ahead of tomorrow’s Q2 GDP), Swiss and Turkish CPI to digest, while ahead also lie Brazilian and South African Q2 GDP. The run of central bank speakers is quite plentiful, though outside of Riksbank’s Thedeen most will not be talking about the economic or monetary policy outlook. Govt bond supply is quite plentiful with Japan 10-yr, German 2-yr and Austria 10 & 52-yr.
UK BRC Retail Sales (like for like 0.8% y/y) got a boost from a spell of warmer weather after the coolest summer since 2015, but at just 0.4% y/y in the 3 months to August, household goods spending remains at best tepid, above all in the Non-Food category, which fell -1.7% y/y in the 3 months to August.
Australia’s Q2 Current Account will only contribute 0.2 ppt to Q2 GDP and follows a run of misses Q2 GDP components from Construction Output at just 0.1% q/q, Private CapEx -2.2% q/q, Corporate Profits -5.3% q/q, all implying a substantial miss relative to a forecast of tepid 0.2% q/q for GDP. But a robust 1.4% q/q rise in Govt Spending will add 0.4 ppt, suggesting any miss will likely be small. Nevertheless, it should act as a prompt for the RBA to tone down its hawkish rhetoric.
The US Manufacturing PMI is expected to see a marginally small from July’ 49.6 to 48.1 (prov. 48.0), while the more important ISM is seen edging up to 47.5 from 2024’s low in July of 46.8, with particular focus on the Employment (last 43.4) and Orders (last 47.4) components as markets attempt to gauge the Fed’s rate cut trajectory. It should of course be borne in mind that the Manufacturing ISM has only once been above 50.0 (in March 2024) since October 2022, and while manufacturing clearly went through a weak period in 2023, it has not delivered the recession that so many have been busily touting for 18 months.
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