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Middle East Daily
SOOJIN KIM
Research Analyst
DIFC Branch – Dubai
T: +44(4)387 5031
E: soojin.kim@ae.mufg.jp
MUFG Bank, Ltd. and MUFG Securities plc
A member of MUFG, a global financial group
Middle East Daily
COMMODITIES / ENERGY
Oil slumps on oversupply fears as US pressures India over Russian crude imports. Oil prices extended losses after a monthly drop in August, with Brent sliding toward USD67/b and WTI below USD64/b, as traders weighed the risk of oversupply and geopolitical frictions. Market focus turned to a summit in China where Indian Prime Minister Modi met Russian President Putin, amid US pressure on India to curb Russian crude imports through new secondary tariffs. India pushed back while continuing to buy Russia’s oil alongside some US cargoes. The global benchmark has already fallen about 10% this year, pressured by swelling OPEC+ output and fears that a US-led trade war will weaken demand, with the IEA warning of a record glut in 2026. OPEC+ is set to review its strategy at a September 7 virtual meeting. Meanwhile, hedge funds cut bullish bets on US crude to the lowest in nearly 18 years, underscoring fragile sentiment, as US officials accused India of “fuelling the Russian war machine” by keeping its oil trade links with Russia intact.
Gold holds near record as Fed uncertainty and Trump’s tariffs fuel safe-haven demand. Gold hovered near USD3,445/oz, just below record highs, as investors weighed uncertainty over the Fed’s independence, Trump’s contested tariffs, and key US jobs data due this week. A court has yet to rule on Trump’s attempt to remove Fed Governor Lisa Cook, raising concerns about central bank autonomy, while an appeals court found Trump’s global tariffs illegal but let them remain in place pending litigation. Price, which spoked to nearly USD3,500/oz in April on tariffs fears, remain supported by ETF inflows and safe-haven demand. Markets are now focused on Friday’s job report, expected to show weaker hiring and higher unemployment, which could reinforce bets on a Fed rate cut in September and further support gold.
MIDDLE EAST - CREDIT TRADING
End of day comment – 29 August 2025. Month end brought mixed flows, overall tilted to net buying. In macro markets the steepening of the UST curve resumed which impacted a bit flows in long end bonds in the afternoon to better selling. Overall spread moves remain small and gradual. The most active credit by far remains QATAR. It felt like every bond was trading today, we still saw EM dedicated accounts selling on the index exclusion. 50s were most active closing -0.5pt/+1bp. In the belly the 34s cleared most, closing -0.125pt/unch. Against this the AD complex looked quiet, but here as well the afternoon saw selling flows in long end bonds on the back of the UST moves without moving spreads, 54s closing -0.25pt/-1bp. Higher beta names had month end buying flows from RM and ETFs outperforming, both MOROC and OMAN closing about 3bp tighter across the curve with the inflows holding cash prices up. Fins and corps were quiet. DPWDU called their perp and will redeem the notes on Oct 1st. apart from moves in long end yields the market should turn its attention to new issuance post labour weekend.
MIDDLE EAST - MACRO / MARKETS
Egypt and Qatar advances USD7.5bn investment partnership. Egypt and Qatar’s USD7.5bn partnership package builds on earlier discussions dating back to April 2025, when President El-Sisi visited Doha and the two countries first agreed on a framework for large-scale Qatari investment. At that time, both sides emphasised channelling funds into direct investments rather than deposits, signalling a shift toward long-term economic collaboration. During follow-up talks in New Alamein on 28 August, Prime Minister Mostafa Madbouly and his Qatari counterpart reaffirmed this commitment, with Egyptian officials stressing that specific projects would be announced soon. Although details remain pending, the partnership is expected to target agriculture, food security, real estate, tourism, and hospitality, while also formalising cooperation through agreements on social insurance, agricultural development, and institutional consultations. This continuity from April to August highlights both the strategic depth of the partnership and Qatar’s role in supporting Egypt’s broader reform and stabilisation agenda. It also follows earlier Qatari commitments , including a USD5bn investment pledged made in 2022, which was only partially deployed, demonstrating Qatar’s ongoing but cautious engagement with Egypt’s economy.
S&P affirmed Jordan’s BB- rating with stable outlook. S&P has affirmed Jordan’s sovereign credit rating at BB- with a stable outlook, citing steady economic performance, reform momentum, and strong external support despite regional challenges. The agency projects GDP growth of 2.6% in 2025, rising slightly to 3&-3.1% in 2026-2027, driven by tourism and trade recovery. Fiscal conditions are improving, with the budget deficit expected to narrow from 2.8% of GDP in 2024 to 2.4% in 2025, while public debt is projected to decline to around 90.9% of GDP. Inflation is anticipated to remain contained at about 2%, underpinned by the dinar’s peg to the US dollar. S&P also highlighted the role of IMF backed reforms in strengthening Jordan’s fiscal sustainability and overall economic resilience.
