Written Commentary
ADM Reports Second Quarter 2026 Results
August 4, 2026
Persian Gulf tensions on the rise again, as UK labour data is digested, ahead of German ZEW survey and array of US Industrial Production, Import Prices and Housing Starts, along with ECB’s Lane speech.
- U.K.: Payrolls, Vacancies and Private Sector Earnings suggest labour demand continues to weaken, implying BoE rates on hold for longer.
- U.S.A.: Import Prices expected to echo softer PPI as energy prices drag, some offset likely from chips, electronics.
- U.S.A.: Industrial Production seen eking out small gain, divergent signals from flat weekly hours and ISM Production surge.
- Watch the CGTN Europe interview about latest China data and economic outlook
EVENTS PREVIEW
The twists and turns of the ‘negotiations’ between the US, Iran and GCC countries took a surprising shift yesterday with news that the US President threatened to bomb Oman if ‘it got in the way of the US’, above all surprising given that Oman is perhaps the most neutral of all the GCC states, that has been a close security collaborator with the USA for many decades. Be that as it may, both sides have made it clear that they are not going to extend the long ‘dead in the water’ MoU; the question is the extent to which one or both want to re-escalate the conflict, and indeed if they can do so on a protracted basis, given well-documented munitions supply chain constraints. As the summer holiday season draws to a close, markets are having to face the risk that this is going to be a much more protracted conflict that will keep energy prices elevated, above all refined products, and by extension that the risk on interest rates is skewed to the upside for most economies.
For all that the latest Anthropic revenue data point to strong growth, the gnawing doubt about the mounting pile of debt to finance AI investment, its long-term ROI prospects, the pressures on related supply chains, and the competition with governments’ overburdened fiscal positions is going to remain.
The day’s statistical schedule will find its highlights in the overnight UK labour market report ahead of Germany’s ZEW survey and a run of US data that includes: Industrial Production, Import Prices, Housing Starts and Pending Home Sales, while ECB’s Lane is again the only central bank speaker.
** U.K. – June/July labour data **
While surveys have pointed to some stabilisation in the UK labour market, today’s data suggest continued weakness in labour demand, with Payrolls down -13K (and June revised down to -13K from flat) and Vacancies slipping to a new 5-yr low at 707K, while the Unemployment Rate held at 4.9% against expectations of a dip to 4.8%. Private Sector Pay growth at just 2.8% y/y is at its lowest since late 2020, and all of this will only harden the MPC majority’s view that second round effects from the current bout of energy induced inflation are likely to be muted, so rates should remain on hold in the near term.
** U.S.A. – July Industrial Production, Import Prices **
Industrial Production is expected to pick up modestly to 0.3% m/m, with Manufacturing Output seen up 0.2% m/m, with inputs for these diverging on the month. On the one hand, Manufacturing Hours were barely changed on the month (though this may be a function of a potential seasonal adjustment fault for the month); on the other, the ISM Manufacturing Production sub-index surged from 52.2 to 58.5, the best level since early 2022, with plenty of strength also seen in regional Fed manufacturing surveys. Import Prices are expected to echo PPI, with a modest 0.1% m/m increase seen for headline and the ex-Petroleum measure, with headline perhaps seeing more of a drag from energy prices, but perhaps offset on the core measure by continued AI investment paced upward pressure from semiconductor prices.
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