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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 rises as Iran tensions offset large US inventory build. Oil prices advanced as escalating tensions surrounding Iran outweighed a sharp increase in US crude inventories. Brent climbed above USD69/b and WTI hovered near USD64/b, even after the American Petroleum Institute reported a 13.4 million barrels stockpile build last week, potentially the largest since November 2023. Markets focused on reports that the US is considering seizing tankers carrying Iranian crude and may deploy another aircraft carrier strike group to the region if nuclear negotiations fail. Crude has gained more than 10% this year, supported by geopolitical risks tied to Iran, with concerns that unsuccessful talks could trigger US military action or disrupt oil flows from the OPEC member. President Trump is set to meet Israeli Prime Minister, who has called for broader negotiations addressing Iran’s missile program and regional activities.
Gold holds above USD5,000 as weak US data bolsters rate cut expectations. Gold edged higher, consolidating above USD5,000/oz after weaker than expected US retail sales strengthened the case for potential Fed rate cuts. Gold rose as much as 0.6%, recovering further from a sharp late-January correction that daw prices plunge about 13% in two sessions after hitting a record above USD5,595/oz. The rally had been fuelled by geopolitical tensions, concerns over Fed independence, and investor rotation away from currencies and sovereign bonds, before speculative excess triggered a pullback. Gold has since regained roughly half of those losses and continue to trade near the USD5,000 level. Market participants are closely watching upcoming US labour data for policy signals, as lower borrowing costs typically support non-yielding assets like gold. While some policymakers have signalled patience on rates, expectations of potential easing remain a supportive factor for gold.
MIDDLE EAST - CREDIT TRADING
End of day comment – 10 February 2026. A much more active session compared to yesterday. The morning still felt a bit wobbly from Monday’s selling, but soon flows became more balanced and with the UST rally more and more buying interest emerged. After prices moved higher it was a bit of a spread buyers vs yield sellers’ market. In terms of spreads up to 10y bonds closed on average +1bp as the market stopped buying bonds into lower yields, especially around the 5y area. For duration bonds it was a different game. ADGB got bought and bid up aggressively even outperforming the UST move, ADGB 70s closed +1pt/-5bp, 54s +1.25pt/-2bp. Qatar followed suit but with less activity, 49s closing +1.125pt/-2bp. What also gathered a good bid were high beta credits, OMAN long end repriced 1.25pt higher/-3bp as was MOROC. On the primary side it remains a quieter month so far, EBIUH priced its 5y 500mm EUR green bond at MS+77bp, that's very close to outstanding FABUH and QNBK 5y EUR, but there is demand for EUR denominated paper. Also Mashreq mandated a PNC5.5 year AT1. NFP tomorrow should be the next catalyst.
MIDDLE EAST - MACRO / MARKETS
Egypt inflation slows further, strengthening case for additional rate cuts. Egypt’s inflation slowed to 11.9% y/y in January from 12.3% y/y in December, its lowest level since September, reinforcing expectations that the Central Bank of Egypt (CBE) may cut interest rates tomorrow. Core inflation, which excludes volatile items, also eased to 11.2% y/y from 11.8%, while monthly inflation accelerated to 1.2% compared with 0.2% in December. The moderation continues a sharp disinflation trend from the record 38% peak in September 2023, following currency reforms and as international financial support package, although inflation remains above pre-crisis levels and progress toward single digits has been gradual amid subsidy reductions and periodic price adjustments. Food and beverage prices, the largest component of the consumer basket, rose modestly on an annual basis, while seasonal demand linked to the upcoming Ramadan period could add short-term pressures. The benchmark deposit rate currently stands at 20%, leaving Egypt with one of the highest real interest rates among EM, which has supported foreign inflows into local debt but also provides room for further easing. Looking ahead, we expect 100bps cut as policymakers balance supporting growth and investment against risks from exchange rate volatility, global energy prices, and external financing conditions.
PIF Forum secures SAR60bn in agreements. The fourth PIF Private Sector Forum concluded with over 135 MoUs worth around USD16bn, drawing more than 13,000 participants and +100 PIF portfolio companies. PIF announced investment opportunities exceeding USD18.7bn, while its private sector platform has delivered 190 opportunities valued at USD10.7bn through global partnerships and supply chain localisation. Between 2021 and 2025, PIF invested ~USD200bn domestically and contributed ~USD243bn to non-oil GDP (2021-2024), representing nearly 10% of non-oil GDP in 2024. Local content spending reached ~USD158bn (2020-2024) and local contractor participation in PIF projects rose to 67% in 2025.
