Written Commentary
ADM Reports Second Quarter 2026 Results
August 4, 2026
Middle East and Russia/Ukraine developments still cast a long shadow as focus turns to US CPI, IEA and OPEC monthly Oil Market Reports, and USDA WASDE; India CPI and weekly oil inventories also in view.
- US CPI: gasoline, air fares, auto insurance and hotel prices expected to restrain prices, core CPI seen at multi year low, but Fed targets core PCE.
EVENTS PREVIEW
Although Persian Gulf developments remain central, markets are becoming more immune (or rather taking a more ‘heads over heart’ stance) to the contradictory rhetoric coming from the US, Iran and those attempting to mediate, and will be focused on US CPI, with Indian CPI the only other highlight of a modest data schedule.
While there are no scheduled central bank speakers, the energy sectors have the IEA and OPEC monthly Oil Market reports and weekly EIA inventories, while agricultural commodities look to China’s CASDE and USDA WASDE monthly reports, with corporate earnings from Tencent and Cisco also in view.
News overnight that the US requested Ukraine to stop attacking Russian oil terminals is a measure of the level of US administration’s concern about energy prices, and perhaps a signal that there may be more concessions made by the US on Iran retaining some outright control over the Strait of Hormuz, in order to get it re-opened, though how it could argue that this was a ‘win’ outside of deploying general political bluster is a different matter. But with the mid-term elections looming ever larger in the headlights, it may have to be a concession that has to be made.
** U.S.A. – July CPI **
A confluence of factors are seen pacing a modest 0.1% m/m headline CPI increase following the sharp than expected -0.4% m/m drop in June, which would see the y/y rate dip to 3.4%, with a very average 0.2% m/m core CPI print seeing a drop in the y/y rate to 2.5%, the lowest reading since March 2021. A 3.6% m/m fall in gasoline prices, drops in airfares, hotels and indeed auto insurance, as well as used car prices, with benign base effects from last year’s tariff related increases on goods price should help to keep inflation subdued. While such a core CPI outturn would suggest inflation continues to fall, the fact is that the core PCE Deflator, which the Fed targets (for the moment), does not, given that it stood at 3.3% y/y in June.
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