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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 slips on surging US inventories and broader market sell-off. Oil prices declined as risk aversion swept global markets and industry data signalled a sharp rise in US crude stockpiles. Brent fell toward USD64/b and WTI hovered near USD60/b, following reports from the American Petroleum Institute showing a 6.5 million barrel inventory jump, the largest since late July. The sell-off followed renewed strength in the US dollar and losses in global equities, dampening commodity sentiment. Brent has now dropped about 14% YTD, pressured by rising OPEC+ and non-member output that has reignited fears of a global oversupply. The alliance recently announced another modest December supply hike but plans to pause increases in early 2026. Meanwhile, Russian oil infrastructure remains under pressure from intensified Ukrainian strikes, further straining supply routes after US sanctions led India and China to curb imports of Russian crude.
Gold rebounds as market selloff revives safe-haven demand. Gold prices rebounded toward USD4,000/oz as investors flocked to safe-haven assets after a global stock selloff sparked concerns over stretched equity valuations. The recovery followed a sharp 2% drop in the previous session, when several Fed officials refrained from backing another rate cut in December, citing uncertainty over inflation and labour market trends. The renewed risk-off sentiment lifted Treasuries and reignited demand for bullion, which remains up around 50% YTD after reaching a record high last month. Although gold’s recent pullback was accompanied by ETF outflows and signs of overheated speculative positioning, underlying driver such as persistent geopolitical uncertainty, strong central bank buying, and sustained private investor demand continue to support a positive medium-term outlook for gold.
MIDDLE EAST - CREDIT TRADING
End of day comment – 04 November 2025. Cash prices continued to adjust to the left today, but we are closing well off the wides. Flows were skewed to selling in the morning but became more balanced in the afternoon. Like mentioned post FED and the tighter spread move, it will take a few days to normalise and today it was in a combination of slightly lower cash prices and lower UST yields. In IG new QATAR were active with different fortunes, 10y sukuk held well and is going out 99.58/99.68 from r/o 99.533, flow wise afternoon buyers steadily pushed it higher. By contrast new 3y languished and closed 99.45/99.55 from 99.623 r/o with flows dominated by sellers, it also follows the pattern that dealers are reluctant to warehouse bonds below 4% yield. Away from the new issue ADGB and QATAR curves closed 3/5bp wider today with long end bonds outperforming a touch. Seen the same OMAN, long end bonds held well and were bought in the afternoon like 51s closing +0.125pt/+3bp. Against this though the belly was for sale, especially 31s closing -0.25pt/+6bp. Fins and corps were slow in terms of activity. The market is awaiting new SIB which will price at T+95bp (500mm) and QIIBKQD which announced a 5y sukuk.
MIDDLE EAST - MACRO / MARKETS
Gulf PMI divergence. October PMI data from the Gulf show clear divergence in private-sector momentum. The UAE’s non-oil headline PMI slipped modestly to 53.8 from 54.2 in September, reflecting continued expansion albeit at a softer clip, with firms noting solid new business and output growth but tempered hiring due to cost pressures and capacity constraints. Dubai’s regional PMI, by contrast, rose to 54.5, its highest reading in nine months, powered by a surge in retail, tourism, and wholesale trade, indicating the emirate’s strong rebound in services and internal demand. In Kuwait, the PMI climbed to 52.8 from 52.2, showing both increased output and improved employment, driven by renewed consumer confidence and easing supply bottlenecks. Meanwhile, Qatar’s non-energy private sector cooled, the PMI fell to 50.6 from 51.5. signalling marginal growth as firms reported weaker new orders, slower inventory accumulation and more cautious hiring plans.
GCC debt market expands 32% in Q3 2025, driven by Saudi Sukuk surge. Kuwait Financial Centre reported that GCC bond and sukuk issuance surged 32% y/y to USD38.7bn across 137 deals, underscoring strong regional financing momentum. Saudi Arabia dominated the market, issuing USD20.3bn (52.5% of total), followed by the UAE (USD5.8bn), Qatar (USD5.7bn), Kuwait (USD3.4bn), Bahrain (USD2.5bn), and Oman (USD0.9bn). Corporate issuances made up 68.6% of the total, while sovereign borrowing more than tripled to USD 12.1bn. Sukuk issuance rose sharply, up 203% y/y to USD20.4bn, overtaking conventional bonds, which fell 19%. The financial sector led activity with USD21.5bn (55.6% of total), followed by government issuers (USD11.1bn). Short-term instruments under five years comprised over half of total deals, and USD-denominated issuances continued to dominate at 72.5% of the market. About 68% of issuances were rated, with 61% classified investment-grade, reflecting growing depth and sophistication in the region’s debt capital market.
