Edward Meir's week in review and thoughts for the week of Aug. 31, 2026

Investors have also figured that tariffs on $20 billion of bilateral trade are a relatively small sum and should not hurt either country all that much. In Canada’s case, the applied average tariff the country would face for its exports to the US would now rise from 8.5% to 11.0%. That’s a manageable number and not far from what other G7 countries are paying. We should also note that the US-Mexico-Canada Agreement (USMCA) provides a measure of “protection” to the bulk of the items being tariffed. It thus takes the sting out of this latest escalation. (As things stand, the USMCA is renewed annually—provided that both countries agree to proceed). The danger lies in the possibility the two countries do not renew the deal or raise tariffs on each other again outside of it.

In another important day for the markets, the Jackson Hole Economic Policy Symposium started on Friday in Wyoming. Federal Reserve Chairman Kevin Warsh wasted no time revisiting the inflation issue. Warsh said he was “hard pressed” to describe US financial conditions as restrictive. He also noted that credit and loan markets are showing few signs of policy restraint. Meanwhile, real consumer spending has been healthy, up by more than 2% over the past four quarters. And the labor market remains strong, Warsh added. Still, he noted that, with labor supply barely growing, monthly job gains are running low.

Given all those factors, Warsh said the central bank “must be confident that underlying inflation is moving to our objective, clearly, and at sufficient speed. Otherwise, we have work to do.” That remark strongly suggested interest rates will increase in September. Markets now assign odds of 57% for that to happen, up from the 35% assessed earlier in the week. 

Although US equity markets turned sloppier on Friday following Warsh’s speech, stocks still had a decent week. The S&P 500 and the Dow each gained 0.5%. The NASDAQ rose by 0.9%. In the bond market, two-year rates settled up 12 basis points to 4.35%. The entire increase came on Friday and just after Warsh spoke. Yields on three-year and five-year paper hit fresh highs for the year as well. The long end of the curve was more tranquil. The 10-year note settled down two basis points on the week, at 4.72%. 

Given the rise in short-term rates, the general dollar index saw a decent move last week. It ended at a two-week high. Its strength, particularly on Friday, sent both gold and silver prices reeling. For the week, each complex lost about 4%. 

In the base metals space, despite dollar strength, we had a far more decent showing for the week than the precious group. Zinc was the best performer, up some 5.3% and now at a four-year high of close to $4,000/ton. Prices have been moving up on account of strong technicals, along with concern about tightening supply. On the latter point, treatment charges for concentrates are edging deeper into negative territory. Nickel and tin were each down about 1.3% on the week. Aluminum ended flat, and lead finished up by about 1.2%. Copper ended with a 1.45% gain and hit a fresh record high of $14,437/ton ($6.55/lb). Tight inventories and a rise in LME warrant cancellations boosted valuations. 

In the energy markets, the lack of renewed fighting, a modest increase in the number of Persian Gulf sailings, and relatively quiet conditions in the Red Sea, all contributed to an easier tone in the crude markets last week. Reports that Iran and Oman agreed on a revenue-sharing arrangement for traffic through the Strait of Hormuz also weighed on valuations, as did the US Treasury’s latest sanctions campaign against Iranian oil sales.  

The tougher set of rules is leading to perceptions that more Iranian barrels will now be sitting unsold. However, it remains to be seen if Iranian counterparties like China, Turkey, and Pakistan will “play ball” and prevent their banks from dealing with Tehran. Already, China said it would not do so. And we suspect the Trump administration is not going to press the issue ahead of Xi Jinping’s visit to the White House. 

Meanwhile, Goldman Sachs on Thursday estimated recent Gulf exports at 15 million barrels per day (mbpd) to 16 mbpd. That figure is 7-8 mbpd below pre-war levels but 5-6 mbpd above March, when the fighting was at its worst. Brent futures finished the week at $88.29 per barrel, down by about $6/barrel, while West Texas Intermediate (WTI) ended at $83.44/barrel, down by about $3.60/barrel. We saw $0.10–$0.13/gallon gains in gasoline and heating oil, with cracks also remaining very strong. Natural gas prices bucked the trend and ended higher on the week, at $2.88 per MMBtu.

In other developments on the energy front, there were reports that Venezuela is considering leaving OPEC. But there was no official confirmation of this. Over the weekend, President Trump also announced that the US government and an “experienced private operator in Venezuela” would take out a 100-year concession on the country’s oilfields that would cover 63 billion barrels of proven reserves and generate nearly $100 billion in private investment. The Venezuelan government did not respond to a request for comment by Reuters. But it acknowledged that “a major agreement has been reached establishing the operational management framework for 17-21 oilfields, which involves a significant investment in drilling rigs to boost oil production.”

Macro readings and other news from the past week

• The July personal consumption expenditures (PCE) inflation report reinforced Warsh’s inflation message. The monthly index rose by 0.2% from the June reading of -0.1%. The core was up by 0.2% from the prior reading of 0.1%. The year-over-year inflation picture remains elevated as well, running at 3.7% overall. The core rate is only slightly lower, at 3.3%. 

• In housing news, new single-family home sales dropped 10.5% in July to a 607,000 annual rate, the weakest showing since January. Supply increased to 9.6 months at the current sales pace, while the median selling price fell to $393,800—its lowest in roughly four years. Separately, the weekly Mortgage Bankers Association (MBA) mortgage applications index fell by 1.0%, adding to last week’s 0.4% decline. 

• July personal income rose by 0.4% (consensus and prior both came in at 0.2%). Personal spending was up by 0.2% (consensus 0.2%, prior 0.3%). 

• Q2 GDP was revised to +1.5%, no change from the prior reading. A key takeaway was that real final sales to private domestic purchasers, a measure of consumption, rose to 4.2% from 3.9%, offsetting the drag generated by imports. US corporate profits increased by $401 billion at a seasonally adjusted annual rate, the second-largest increase on record. 

• July durable orders rose by 1.1% (consensus and prior both at 0.5%). But the ex-transportation reading was weaker, coming in at 0.4% (consensus 0.5%, prior 1.1%). The headline beat was driven by a nearly 13% jump in orders for non-defense aircraft and parts. Growth in orders (ex-transportation) undershot expectations partly due to a pullback in new orders for computers and electronic products. They were off by 1.1% on the month but still up a healthy 14.3% year-over-year. 

• Weekly initial jobless claims came in at 203,000, slightly lower than the week prior. Weekly continuing claims clocked in at 1.778 million and are just above their lowest levels of the year. 

• There was a sharp drop in the latest July Chicago Purchasing Managers’ Index (PMI) reading. It fell to 47.1, about 10 points below both the consensus and the prior month’s reading. 

• The August University of Michigan consumer sentiment reading dropped to 51.7 (consensus 51.0, prior 55.2). Persistent inflation concerns undercut sentiment. In a related measure, the Conference Board’s confidence index slipped to 89.4 in August from 90.2 in July, its lowest reading since January. The deterioration was concentrated in the expectations component, where the index dropped to 68.2 as consumers soured on future business and labor-market conditions. 

• US Midwest primary aluminum premiums rebounded last week. No surprise here given the collapse of the US-Canada trade talks. Spot premiums were around $1.12/lb. and did not move much through the ups and downs of the talks. But the forwards jumped up by about $0.20/lb, recouping all the prior week’s losses. 

• Emirates Global Aluminum (EGA) announced last week that 25% of the reduction cells at its Al Taweelah smelter in Abu Dhabi have now restarted, up from about 18% from early August. EGA expects production to return to pre-incident levels in Q1 of 2027. 

• The European Commission is expected to unveil plans in September for a first-ever export duty on aluminum scrap, with a 15% rate likely being levied. However, trade associations like European Aluminum are pushing for a 30% duty. Meanwhile, data from the International Steel Statistics Bureau shows the EU shipped 567,000 tons of aluminum scrap between January and May 2026, up nearly 4% from the same period last year. In 2025, a record 1.27 million tons of aluminum scrap was exported, mostly to India, China, and Turkey. 

• The proposed European scrap duties could exacerbate supply going into China. Reuters cites ANZ Research as saying that “China’s smelters are having to increasingly rely on copper scrap as a feedstock amid copper concentrate constraints. Scrap accounted for 25% of feedstock in [the first half of 2026], up from 22% a year earlier. The physical market remains tight, with persistent supply side issues exacerbated by robust demand,” ANZ added.  

• China’s industrial profit growth slowed to 11.2% year over year (y/y) in July from 15.1% in June, although profits for January-July were still 17.6% higher than a year earlier. The industry split remains notable: electronics profits more than doubled in the first seven months while non-ferrous smelting and rolling profits rose by 92%. But automotive profits fell 20%, and ferrous metal smelting and rolling profits dropped 51%. 

• Germany’s Q2 GDP growth was revised up to 0.3% quarter over quarter (q/q), with exports increasing 2.0%. Manufacturing value rose by 0.9%. But investment in machinery, equipment, and vehicles fell by 1.4%. August surveys offer a more encouraging forward signal, with Ifo export expectations jumping to 9.6 from -2.8, their highest level since February 2022. Meanwhile, pressure is building for stronger trade defenses against Chinese competition. German business groups are increasingly calling for faster EU action against subsidized Chinese imports and discussing local-content requirements.

• Bloomberg reports that an executive at one of Radiant World’s counterparties estimated that the total value of fraudulent invoices held by Radiant World’s creditors could be as high as $1 billion — an amount that would make the fraud the largest in the commodities industry since Enron. Meanwhile, Radiant World is struggling to hang on, effectively cut off by its banks and trading partners. This weekend, Radiant filed a $1.4 billion lawsuit against Glencore, accusing the firm of not honoring its commitments.

This week’s US macro readings 

Nothing comes out on Monday. On Tuesday, we get the ISM manufacturing PMI for August, followed by July construction spending and July job openings. Wednesday brings us the ADP national employment number and July factory orders. On Thursday, we get weekly initial claims, followed by the ISM services reading. Finally, on Friday, we get the non-farm payroll report along with accompanying details.

We wish all our readers all the best for the upcoming week.