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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 eases as confirmation of US-Iran talks tempers conflict fears. Oil prices fell for the first time in three days after Iran confirmed it would hold negotiations with the US in Oman, reducing immediate concerns about military strikes against OPEC producer. Brent slipped toward USD68/b after rising nearly 5% over the previous two sessions, while WTI traded near USD64/b. While the talks have lowered short-term escalation risks, uncertainty remains over whether the two sides can resolve major differences, keeping some geopolitical risk premium in prices given the region supplies about a third of the world’s crude. Traders also watched developments around Ukraine peace efforts, as Russian attacks on energy infrastructure add another layer of uncertainty, while US crude inventories fell to a one-month low, though by less than markets had expected.
Silver slides again as volatility persists after historic rout. Silver fell sharply, wiping out a brief two-day rebound as the market continued to search for a price flow following last week’s historic selloff, while gold also moved lower. Spot silver plunged as much as 16.6%, retreating from levels above USD90/oz reached earlier in Asian trading, and gold slid up to 3.5% in volatile conditions. The renewed weakness comes after a speculative-driven rally fuelled by geopolitical tensions and concerns over the Fed’s independence abruptly reversed, leaving silver with its largest ever daily drop and gold with its steepest fall since 2013. Markets are not digesting the policy outlook following Kevin Warsh’s nomination as Fed chair, with President Trump signalling continued expectations for rate cuts, which remain supportive for non-yielding precious metals despite ongoing price turbulence.
MIDDLE EAST - CREDIT TRADING
End of day comment – 04 February 2026. Another mixed day. What was different today is that QATAR long end underperformed ADGB long end reversing the move from yesterday. Especially QATAR 48s/49s were for sale closing -0.125pt/+2bp vs ADGB 54s getting a bid closing +0.25pt/-2bp. What wasn't different from yesterday was the selling flow from ETFs in the ADGB complex, especially in quasi sovereign. That supply was well absorbed though. Whilst the likes of ADQABU, MUBAUH or ADNOUH close about 2bp wider today the spread move is more attributed to the UST moves, especially the steepening rather than the selling flow. Another mover today was SHARSK/SHJGOV which saw some buying interest in the 10y area, which extended into buyers of belly bonds in the afternoon, SHARSK 29s closed +0.25pt/-3bp, 36s +0.375pt/-3bp. Fins and Corps were on the quiet side but overall with more de-risking flows. Primary markets in my space remain radio silent.
MIDDLE EAST - MACRO / MARKETS
Saudi Arabia to invest USD2bn in Turkey’s solar energy, boosting renewables. Saudi Arabia will invest around USD2bn to build large scale solar power plants in Turkey, marking the first phase of a broader renewable-energy partnership between the two countries. Under an intergovernmental agreement signed in Riyadh during Turkish President Erdogan’s visit, Saudi companies will develop two solar projects with a combined capacity of 2,000MW in the provinces of Sivas and Karaman, followed by an additional 3,000MW of wind and solar capacity to be finalised later, bringing total planned capacity to 5,000MW. Turkey will purchase the electricity under 25-year contracts at record-low prices for renewable power, a move expected to strengthen energy security and support the country’s clean-energy transition, while supplying electricity to around 2.1 million households. The announcement lifted Turkish energy stocks, with renewable energy firms and utilities posting solid gains on expectations of long-term investment inflows and capacity expansion.
Qatar-Germany launch deep-tech innovation hub in Doha. Qatar and Germany have expanded their deep-tech partnership with the launch of the ESMT Berlin DEEP Institute and Creative Destruction Lab (CDL) in Doha, creating a new platform to connect the two countries’ innovation ecosystems. Backed by the Qatar Investment Authority (QIA) and the Qatar Research Development and Innovation Council (QRDI), DEEP Qatar will serve as a hub for technology transfer, science-based entrepreneurship, and venture creation. The initiative is structured around three pillar. CDL-Doha, which will support more than 150 AI, health, and Agri-food ventures over three years. DEEP academy, an elite programme training researchers to commercialise scientific research. And DEEP Pioneers, a venture-building engine paring promising technologies with experienced entrepreneurs. Financing for CDL-Doha will come from QIA’s Fund of Funds programme, while the QRDI Council will oversee alignment with Qatar’s national innovation strategy, reinforcing the country’s ambition to attract global deep-tech companies, boost private-sector R&D, and strengthen cross-border innovation with Germany.
