Daily Economic Update

US: ADP weekly employment data shows signs of stalling momentum as job growth eases further. Based on ADP (a major payroll processing firm) data, private sector jobs increased by an average of 8.25K per week in the rolling four-week period ending July 25, easing from 11K in the previous week and versus the recent peak of 41K in early May. Employment growth has now slowed for six straight weeks, hitting its lowest level since January, and further indicating that the job market is losing the momentum seen earlier this year. The previously-reported non-farm payroll report showed a 23K decline in jobs in July, with 3-month average job gains dropping to just 20K per month, sharply down from 142K in May. Despite the recent soft labor market data, stubbornly elevated inflation, which has remained above its 2% target for over five years now, remains the bigger concern for the Fed. However, any further weakening in job growth, especially if accompanied by an increase in the unemployment rate, will bring the Fed’s maximum employment mandate to the forefront again.

Japan: Reuters Tankan survey points to improving business sentiment. The Reuters Tankan survey, a monthly poll of Japanese manufacturers and non-manufacturers that serves as a leading indicator of the key quarterly Tankan business survey compiled by the BoJ, showed business confidence improving in August. Manufacturers’ sentiment rose to +18 in August from +13 in July, the strongest reading since March, supported by robust semiconductor and AI-related demand, while non-manufacturers’ confidence increased to +28 in August from +25 previously on the back of resilient domestic consumption. The survey suggests that Japanese firms remain broadly optimistic with strong technology-related demand and consumer spending continuing to support activity. This strong technology and AI-related demand has been reflected in previously-reported trade numbers, with total exports increasing by a solid 19% y/y in June (semiconductor exports soaring 54%), and remaining in double-digit growth since March.

UAE: ADNOC Group subsidiaries report strong Q2 results amid an expansion drive. ADNOC Logistics and Services (ADNOC L&S) and ADNOC Gas delivered strong Q2 results despite the regional operational challenges. ADNOC L&S reported a record net profit of $951 million, up 303% y/y, while revenue nearly doubled to $2.6 billion and EBITDA rose by 176% y/y to $1.1 billion, supported by fleet expansion and strong demand for logistics services. The company raised its 2026 earnings forecast for the third time this year and continued expanding its fleet, investing $2.3 billion in new and acquired vessels. Meanwhile, ADNOC Gas posted Q2 net profit of $665 million, exceeding the company’s guidance despite disruptions at the Habshan facility and continued constraints to maritime trade through the Strait of Hormuz. The company also marked a major milestone in its long-term growth strategy by awarding $8.2 billion in EPC contracts for Phases 2 and 3 of its Rich Gas Development (RGD) project, bringing total investments in the project to $13.2 billion. As a result, ADNOC Gas raised its targeted EBITDA growth to 60% by 2030 from the 2023 level and plans to invest $28 billion between 2026 and 2030. The RGD project will expand gas processing capacity at Habshan and raise natural gas recovery in Ruwais. Both companies emphasized ongoing investments in digitization and AI technologies to enhance efficiency, safety, and operational performance, while maintaining attractive shareholder returns through dividend distributions.

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