The Week Ahead: August 10th to August 16th, 2026

Intelligence for the Considered Investor

The Week Ahead

10 to 16 August 2026

Good morning. Here is what we are watching this week.

The labour market has cracked; Wednesday's inflation report decides whether the Federal Reserve can do anything about it.

Andy Burnham's government is three weeks old and already learning that the bond market keeps its own calendar. Parliament is in recess until 1 September, so the week's only real domestic test is Thursday's growth figures for the second quarter. The gilt market is the more demanding audience. The ten-year yield spiked to 5.04 percent on the day Burnham took office, unsettled by his talk of fiscal flexibility, and though it has since eased to around 4.95 percent it is still the highest in the Group of Seven. The government inherited that premium and has not yet said anything to earn its removal.

On Thames Water, the news this week is a retreat. Reports in late July that Burnham was poised to force the company into special administration have given way to a Downing Street line that there are no immediate plans, which is less a decision than a way of postponing one. The company still carries some 20 billion pounds of debt and still warns that it runs short of cash by the year's end, and special administration would drop a bill of roughly 2 billion pounds on the taxpayer. Keeping the option open costs nothing today. It is next year's problem, and next year's problem is precisely what a nervous gilt market is trying to price now.

The oil price has done every importing nation a quiet favour. Brent has slipped to around 83 dollars a barrel and American crude to near 77, down more than 7 percent on the week, as Iran and Oman edge toward an arrangement to manage traffic through the Strait of Hormuz. The detail worth knowing is the price of that calm: Iran wants a fee of 5 to 7 percent on the value of every cargo passing through, and recognition of a control over the strait that Washington says it will never grant. A pause built on a demand the other side cannot accept is not a settlement. It is a truce with an expiry date nobody has yet written down.

Then came Friday. The July employment report did not merely disappoint, it contracted: American payrolls fell by 23,000 against expectations of an 83,000 gain, and the two prior months were revised lower. The unemployment rate edged down to 4.1 percent, but for the wrong reason, as people left the workforce rather than found work within it. Wage growth cooled to 3.2 percent, the slowest in five years. Two weeks after three Federal Reserve governors dissented in favour of a rate rise, the labour market has handed them the least convenient reply imaginable.

The other pressure on prices is self-inflicted. Trump's latest reciprocal tariffs took effect on 7 August, lifting the average American import duty to something close to a century high, a tax that reaches the inflation figures with a lag. That is what makes Wednesday's consumer price report the hinge of the week. The jobs market argues for cuts, the tariffs argue for caution, and the July inflation print is the first place those two forces are weighed against each other.

Sweden votes on 13 September, and the campaign that opened this month is more consequential than its low temperature suggests. Prime Minister Ulf Kristersson and his Social Democrat challenger Magdalena Andersson took to rival bus tours in the first week of August, with the centre-left bloc leading by double digits in the polls. On the arithmetic, Andersson is the favourite to return to the office she left in 2022.

The genuine shift is on the right. Kristersson has said plainly that, should his bloc win, he would bring the Sweden Democrats into cabinet rather than leave them supporting his government from the corridor, as they do now. A party with roots in the far right, held at arm's length for a decade, would take ministries for the first time. Markets will watch the krona and the timing of any fiscal loosening, but the deeper signal is constitutional, not fiscal.

It is the contrast with Poland that lingers. Where Warsaw's nationalist right paralyses a government from the presidency, one veto at a time, Stockholm's may simply be invited through the front door. Across Europe the disruptive outsider and the respectable coalition partner are turning out to be the same people. The only thing that varies from capital to capital is which entrance they are asked to use.

Zambia: An Election Its Result Precedes

Zambia holds general elections on Thursday 13 August, and the shape of the next parliament looks settled before a vote is cast. President Hakainde Hichilema, the market-friendly reformer who took office in 2021, seeks a second term against a divided field, with Brian Mundubile of the opposition his principal challenger. A constitutional change has enlarged the National Assembly from 156 seats to 226, and with the opposition failing to field candidates in roughly a third of them, Hichilema's United Party for National Development has already won more than a dozen unopposed. For a country that became the pandemic era's first African sovereign default and then spent four painful years restructuring its debt, the danger now is not chaos but its mirror image: a governing party with too little to check it. The kwacha tends to soften into the vote as dollar demand builds, and the copper price, not the ballot, remains the currency's real master.

Brazil: Cutting Into Strength

Brazil is travelling in the opposite direction to the developed world. Its central bank cut the Selic rate to 14 percent on 5 August, a fourth consecutive reduction from last year's 15 percent peak, as inflation expectations finally begin to settle. Where the Federal Reserve and the Bank of England argue about whether to raise, Brazil is easing into an economy that is still holding up, helped by an oil price it earns from rather than pays for. The real has stayed firm through the cuts. Emerging markets no longer move as a single bloc, and the line that divides them this cycle is drawn by the barrel: who sells it, and who has to buy it.

United States

Consumer Prices, Wednesday 12 August. The most important release of the week and the referendum on Friday's jobs shock. June inflation surprised on the low side at 3.5 percent, with core easing to 2.6 percent, as energy prices fell away after the Hormuz pause. July is expected to tick higher as that energy relief fades and the new tariffs start to bite. Producer prices on Thursday and retail sales on Friday fill in the picture, but Wednesday is the number that sets the odds on a September cut.

United Kingdom

Second-Quarter Growth, Thursday 13 August. The first full read on the economy the Burnham government inherited, covering the three months to June alongside the monthly figure. After a May that grew just 0.1 percent, the market wants evidence the economy has not stalled. Weak growth widens the deficit the autumn Budget has to address, which is why the gilt market will read this line as closely as the Treasury does.

China

July Activity Data, towards the end of the week. Industrial production, retail sales and investment, and the same split as ever between them: the factories busy, the households wary. June had industrial output up more than 5 percent while retail sales crawled along near 1 percent. Until the Chinese consumer rejoins the story, the world's second economy is running on a single cylinder, and no loan prime rate held flat for more than a year is going to change that.

The season's last names of real consequence report this week, and the theme has not changed: who is being paid to build the artificial-intelligence boom, and who merely pays for it.

United States

Applied Materials (AMAT). Fiscal third-quarter results after the close on Thursday 13 August.

Revenue guidance: around 8.95 billion dollars. Expected earnings per share: approximately 3.36 dollars, up about 35 percent year on year. Sources: company guidance, TipRanks.

Applied Materials sells the machines that make the chips, which makes it a cleaner read on the durability of the artificial-intelligence build-out than any single chip designer. When the hyperscalers lift their capital budgets, the equipment makers are where that money lands first. After a fortnight in which the market rewarded spending that already pays and punished spending that does not, this is the supplier's-eye view of whether the orders are still arriving.

United Kingdom

Aviva (AV.). First-half results at seven o'clock on Friday 14 August.

Consensus looks for continued growth in general-insurance premiums, helped by the Direct Line acquisition, and a rising interim dividend. Sources: Aviva investor relations, company guidance.

Aviva is the week's clearest read on the British saver and household. Its integration of Direct Line has lifted general-insurance premiums sharply, and the interim dividend is the line income investors will look to first. In an economy where the government cannot lower borrowing costs and the Bank of England will not, a well-run insurer quietly compounding its payout is the kind of holding that does its work while the macro argument rages overhead. Cisco reports on Wednesday for anyone who wants the enterprise-technology read alongside it.

Results, market reaction and the Clarmond view.

Eli Lilly  LLY · Reported Wednesday 5 August

Higher on the raised guidance. Full-year revenue guidance lifted to 85 to 87 billion dollars, with Mounjaro sales up more than 90 percent.

We said to watch the revenue line rather than the earnings the analysts could not agree on, and the revenue is what delivered, up 48 percent, with Mounjaro and Zepbound still supply-constrained rather than demand-constrained. The weight-loss boom is not cooling. What is left to settle is whether Lilly and Novo Nordisk can hold the margin as the volume scales, and this quarter says they can.

AMD  AMD · Reported Tuesday 4 August

−9% after hours. A beat on every line and a stronger outlook, sold off regardless.

We flagged data-centre sales as the number that mattered, and they more than doubled. It was not enough. AMD beat, raised its outlook and fell nine percent, because the bar is no longer the analysts' estimate but perfection itself. This is the same discriminating market that marked Meta down a week earlier: even genuine acceleration is punished when the price has already assumed it.

BP, also previewed here, reported broadly in line with the roughly 3 billion dollars of profit it had already guided, and gave the market little to argue about.

A fortnight ago the story wrote itself: five major central banks had held, the dissenters wanted to hike, and a rate-cutting cycle had hardened into a tightening debate. One employment report has rewritten it. American payrolls did not merely slow in July, they shrank, and a labour market that contracts while three Federal Reserve governors argue for higher rates is the kind of contradiction that tends to resolve painfully.

So Wednesday's inflation figure carries more than its usual weight. Come in soft, and the case for a September cut is made for the Fed by its own data. Come in hot, and the central bank is caught between a cooling jobs market and prices that will not sit still, made stickier by tariffs of its own government's design. There is a historical echo worth holding lightly here. In 1937 a Federal Reserve worried about inflation tightened into a still-fragile recovery and tipped the economy back into recession; the hawks pressing their case this summer would do well to keep that year somewhere in mind.

Lift your eyes from Washington and the picture inverts. Brazil is cutting into growth, India holds with its economy expanding near 7 percent, and the cyclical vigour has drained out of the old centre toward what used to be the periphery, while Britain pays the highest bond premium in the Group of Seven for the privilege of a new government still finding its feet. Watch the consumer price number on Wednesday, and read it against Friday's vanished jobs. That gap, between a labour market rolling over and prices that will not fall, is the whole of the autumn written in a single line.

With best wishes,
Chris and Mustafa at Clarmond
clarmond.co.uk