Fin-X Weekly Update 24th August 2026
Global equities retraced modestly but held near record highs while government bond yields climbed to multi-year highs across major currencies. Australian corporate earnings were strong, led by the resources sector.
Oil prices rose as tensions in the Gulf intensified, while an abrupt breakdown of US-Canada trade talks resulted in fresh reciprocal tariffs.
Domestic and Chinese activity data pointed to cooling growth, while the S&P Global flash PMIs indicated an acceleration in the US and Eurozone.
This week, attention turns to Australian inflation, Nvidia’s results, and the annual Jackson Hole symposium.
Global stock markets retraced last week but remained near record highs, albeit with higher volatility beneath the surface, as geopolitical tensions stayed elevated and global bond yields rose.
Australian shares outperformed their global peers after the busiest week of the earnings calendar. According to Bloomberg, 146 of 284 S&P/ASX 300 companies have reported so far, delivering a +9.6% annual rise in sales and a +16.8% increase in profits. Resources produced the strongest sectoral gain in annual earnings, up +35.2%, as gold and copper miners benefited from substantially higher prices. BHP recorded a +30% surge in profits, with copper representing 54% of EBITDA.
WiseTech made headlines after the ACCC searched its offices. The shares nonetheless ended the week only -1.2% lower, having recovered from a -9% drop as the news broke on Wednesday.
President Trump said that he was not interested in extending the 60-day truce that expired on Monday, and later threatened to bomb US ally Oman should it enter into negotiations with the Iranians over the conditions of passage through the Strait of Hormuz. Oil rose back towards US$100 per barrel as traders increasingly priced the disruption to the Strait of Hormuz as a semi-permanent shock.
The Treasury Secretary later said that severe economic sanctions would soon follow. Following the abandonment of trade talks between the US and Canada, there was speculation that the US might seek to impose secondary sanctions on countries that continue to trade with Iran.
Prime Minister Mark Carney said that Canada could not reach a deal on Friday after the Americans attempted to impose restrictions on Canadian trade relations with third countries. The tariffs were being imposed under Section 338 of the Tariff Act of 1930, covering roughly US$20 billion of Canadian imports from Saturday and affecting products including electronics, industrial machinery and dairy, on top of existing measures on sectors such as autos, steel and lumber.
Canada will apply counter-tariffs on US$20 billion of US products on 8th September. The Canadian levies will apply to US steel, dairy, appliances, agricultural equipment, electronics, pulp and paper, with further detail to be published in the coming days, the prime minister said.
Total US government debt reached US$40.05 trillion as of Tuesday, compared with US$19.4 trillion a decade ago, according to the Treasury Department. The Treasury reported a US$432.3 billion deficit in July, its highest monthly level in more than five years.
The 30-year Treasury had topped 5.30% a day earlier, its highest since 2007. The Treasury then unexpectedly announced that it would increase buybacks of longer-dated government debt, raising the size of such operations for 10-year to 30-year securities “by at least double”. The measures will likely improve liquidity in longer-dated bonds and marginally lower the term premium.
The pressure on yields was not confined to the US. Germany’s borrowing costs also hit a 15-year high as the country sold €4 billion of syndicated debt maturing in 2056 at a yield of 3.783%, according to people familiar with the matter. The UK likewise sold £4 billion of 10-year debt at an average yield of 5.155%, the highest since 2007.
In terms of economic figures, Chinese activity data showed the domestic economy continuing to decelerate in July. Retail sales slowed from +1.0% yoy to +0.6% yoy, well short of the +1.5% yoy anticipated, while industrial production disappointed, slipping from +5.3% yoy in June to +4.5% yoy. The surveyed jobless rate rose from 5.0% to 5.2%, and property investment (-19.2% ytd yoy) and residential property sales (-13.2% ytd yoy) continued to slide.
Australian unemployment also ticked up, from 4.4% to 4.5% in July, though rounding exaggerated the significance of the change. There was nonetheless some softness in participation and peripheral measures, suggesting that the labour market is gradually cooling. June quarter wage growth was in line with estimates, up +3.2% yoy.
The latest S&P Global flash PMI reports suggested that growth leadership has rotated away from manufacturing towards broadening services activity, supported by one-off events such as the FIFA World Cup.
The second quarter’s manufacturing-led upturn was driven by precautionary stock building amid Middle East supply and price fears, which are now fading, leaving supply chains as the key constraint. Supplier delivery times across the G4 lengthened again in August, with risks stemming from disruption in the Red Sea and Persian Gulf.
Even so, European manufacturing is experiencing its strongest growth in nearly five years, while US activity continues to accelerate. Chris Williamson, Chief Business Economist at S&P Global, said: “US business is booming, with firms reporting the fastest output growth for over four years so far in the third quarter […] The survey data for the third quarter are currently pointing to annualised growth approaching +3.0%, up solidly from the +1.5% pace seen in the second quarter.”
The pace of American hiring also picked up in August, marginally increasing the chances of a September rate hike. This week, Kevin Warsh will deliver his first speech at the annual Jackson Hole Symposium since his appointment as Chair of the Federal Reserve earlier this year.
Nvidia is set to release results on Wednesday night after the close, having recently announced a +15% price increase for its leading data-centre GPUs due to higher semiconductor prices. The market is anticipating another earnings record.
The price rises comes as shares in AI players rebound from July lows, reflecting renewed investor optimism over AI expenditure.
Closer to home, the RBA minutes will be published tomorrow, followed by Australian CPI figures on Wednesday and household spending figures on Thursday.
This week will also bring several regional Fed and US consumer confidence surveys, the updated IFO survey in Europe, inflation and employment readings from several European countries and Japan, and Chinese industrial profits.
Disclaimer
The contents of this communication are prepared by Fin-X Capital Group Pty Ltd (A.C.N. 627 650 293; AFSL 520526 trading as Fin-X Capital). The information contained in this communication is general in nature and does not take into consideration any investors personal objectives, goals, needs and financial situation. You should not rely on the information contained in this document to make any investment decisions without first consulting an investment professional such as your financial adviser. Any unauthorised use of this document is prohibited. This document (including any attachments) is intended only for the addressee, it may contain information of a privileged and confidential nature. If you are not the addressee of this communication, you must not copy, reproduce, disseminate or use this email and its contents. If this communication has been received in error by you, please inform us immediately and securely delete. Sharing, transmitting, copying, disseminating all or part of the contents of this document may result in a breach of the Federal Privacy Legislation and or copyright and trademark infringement of Fin-X Capital Group Pty Ltd and its related entities.
