Written Commentary
ADM Reports Second Quarter 2026 Results
August 4, 2026
Persian Gulf and Black Sea still the dominant overarching factors, with a relatively light macro schedule to end the week; focus on US Retail Sales and Michigan Sentiment, as strong Malaysian & Swiss GDP digested.
- U.S.A.: Retail Sales seen slowing on auto sales and early timing of Amazon Prime Day; Michigan Sentiment expected to be little changed and still weak from long-term perspective.
- USA/Iran: ratcheting up economic isolation highly unlikely to force concessions from Iran.
EVENTS PREVIEW
The week ends with conflicts in the Middle East and Ukraine remaining the overarching factors, as the US threatens to increase economic pressure on Iran. But after 47 years of tensions between the two sides, the efficacy of such measures specifically in changing the course of negotiations has, in principle, been unsuccessful, despite the enormous damage that they have inflicted on the Iranian economy and the population at large. Even if the EU, UK and Canada were to impose the same measures, the fact is that Iran is part of the SCO, and one of the largest recipients (along with Iraq) of China’s Belt and Road investments and also has extensive trade and security relations with Russia. As such, economic isolation measures imposed by the ‘West’ are simply not going to work. Ukraine’s offer to Russia yesterday for both sides to suspend attacks on energy and shipping/transport infrastructure looks to have fallen on deaf ears once again, with Russia doubtless viewing Ukraine’s depleted missile defence capabilities as an opportunity to double down on its attacks. That is sadly a reflection of the EU and US failing to provide sufficient and timely support.
Elsewhere, in Japan, it is now the case that the BoJ will have to deliver a further 25 bps rate hike in September, and signal that a further hike is very likely by the end of the year, if the JPY is not to come under renewed and intense pressure, and further FX intervention is also likely to be necessary in the interim, above all as a signal of intent and commitment.
Against such a backdrop, the day’s regular macro schedule finds its focus on US Retail Sales and Michigan Sentiment, with overnight Q2 GDP data from Malaysia and above all Switzerland adding to the general picture of growth resilience in the global economy. There are no scheduled central bank speakers, with Chinese auto maker BYD the sole highlight of the earnings schedule.
Next week has inflation, labour and Retail Sales readings in the UK, the array of monthly activity indicators in China, Japan Q2 GDP, PMIs and a slew of other surveys in the US and elsewhere, along with July FOMC minutes and US major retailer earnings (Walmart, Home Depot, Lowe’s, Target and TJX).
** U.S.A. – July Retail Sales, Aug prov. Michigan Sentiment
Retail Sales will likely see a drag on headline from autos, though core components are also expected to be constrained, with ex-Autos & Gas and Control Group measures both seen up 0.3% m/m (in part weighed down by the earlier timing of Amazon’s Prime Day event), implying a weak start for Q3 GDP from Personal Consumption. Any undershoot on core measures would likely push back even more on Fed rate hike expectations, following CPI and PPI (though the latter was rather more mixed than the lower than expected headline and core readings implied, given the rebound in ex-Food, Energy & Trade to 0.4% m/m from 0.1%), and perhaps as importantly comments from Chicago Fed’s Goolsbee welcoming the outturns, even if emphasizing the need for further improvement in coming months, given he had previously sounded a much hawkish tone).
Michigan Sentiment rounds off the week’s US data run with a dip to 55.0 from 55.2 expected, and no change in the sub-indices for Inflation Expectations expected.
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