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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 holds steady as traders await key market outlooks. Oil prices were little changed, with Brent trading below USD64/b and WTI near USD60/b, as traders awaited fresh market analyses from OPEC and the International Energy Agency (IEA) for insight into a potential global supply glut. The narrowing WTI prompt spread to just 9 cents, the weakest in since February, signalled easing tightness in the market. The IEA has already projected a record surplus in 2026, while OPEC continues to gradually lift output alongside rising non-OPEC supply. US oil futures have fallen about 16% YTD, weighed down by persistent oversupply concerns. Meanwhile, global trade developments remained in focus, with President Trump hinting that the US and India are nearing a trade deal and claiming India has largely halted Russian oil imports, as the US keeps up pressure through sanctions on Lukoil and Rosneft. Going forward, attention will turn to this week’s OPEC and IEA reports for signals on global supply-demand trends and price direction into early 2026.
Gold extended rally as rate cut bets strengthen after US shutdown deal. Gold climbed to around USD4,140/oz, extending gains after its biggest daily jump since May, as optimism over further US interest rate cuts grew following a bipartisan deal to end the country’s longest-ever government shutdown. The reopening is expected to unlock delayed economic data that will likely reveal a weakening outlook, reinforcing expectations of more monetary easing. Gold’s appeal as a safe-haven and inflation hedge also strengthened after President Trump proposed sending citizens a USD2,000 “tariff dividend”, reviving stimulus-style measures that could spur inflation. While some Fed officials signal caution on additional rate cuts, the broader sentiment remains supportive for gold.
MIDDLE EAST - CREDIT TRADING
End of day comment – 10 November 2025. We came in this morning greeted by improved risk sentiment with the prospect of the US govt shut down coming to an end. UST yields were 7/8bp wider from London close on Friday. With the well-known stickiness in EM cash prices it was clear spreads will be tighter, but the question was by how much. That was a function of flows and whilst reasonably balanced the market still felt heavy throughout the day and selling flows from client side still outnumbered buying flows. As a result cash prices adjusted to the left throughout the day and the market closed 2/5bp tighter overall with prices 0.125/0.375pt lower. There still isn't a great deal of discrimination between credits, high and low beta are moving again by the same amount. In terms of activity, ADGB long end cleared in the afternoon, 54s and 70 s closing -0.25pt/-2bp. QATAR was less active with some morning trades in new 35s sukuk closing -0.25pt/-2bp. In higher beta credits OMAN still has buyers of long end bonds 48s closing -0.125pt/-3bp. Quasi sovereign weren't particularly active, only seen some ADQABU activity with bonds on average 0.125pt lower and 4bp tighter. Financials were mixed.
MIDDLE EAST - MACRO / MARKETS
Egypt’s foreign exchange reserves cross USD50bn threshold, bolstering external stability. Egypt’s foreign exchange reserves reached USD50.1bn in October 2025, marking the first time the buffer has crossed the USD50bn mark. The increase was driven by new Gulf-state investment pledges, improved inflows tied to tourism and Suez Canal revenue, and a firmer US dollar environment that elevated valuation of reserve holdings. The step up in reserves enhances Egypt’s import cover and external liquidity cushion at a crucial juncture when the country is advancing IMF-backed reforms and working to rebuild market confidence. While export growth and foreign direct investment remain central to sustaining this momentum, the enlarged reserve position provides a key policy buffer against external shocks, offering greater flexibility for monetary and fiscal authorities as they steer toward stabilisation and growth.
Saudi industrial output accelerates on broad-based gains. Saudi Arabia’s industrial sector posted robust growth in September 2025, with the industrial production index rising 9.3% y/y, according to the General Authority for Statistics. The expansion was broad-based, led by an 11% jump in mining and quarrying activity, supported by higher oil output. Manufacturing production also strengthened by 6,3%, while electricity and gas output climbed 12.6%. Going forward, industrial activity is expected to remain supported by government-led diversification projects and rising private sector participation in non-oil manufacturing.
Dubai’s economic growth accelerates in Q2 2025. Dubai’s economy expanded by 4.7% y/y in the Q2 2025, reaching USD33.2bn, reflecting continued strength across key non-oil sector. The strong performance was driven by gains in trade, transport, and tourism, supported by robust domestic demand and sustained business confidence. The latest data underscores Dubai’s solid economic momentum and progress toward diversification, positioning the emirate for steady growth in the second half of the year.
