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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 stabilises as signs of a global surplus gain momentum. Oil held steady after yesterday’s sharp selloff, as fresh signals pointed to the long-anticipated global surplus finally materialising. Brent hovered above USD62/b and WTI traded near USD58/b, recovering slightly from a near -4% drop sparked by OPEC’s latest report showing that global supply exceeded demand in Q3. The IEA’s monthly market report may add further confirmation of oversupply. Expectations of a swelling glut have weighed heavily on crude this year, with rising production from OPEC+, non-OPEC drillers, and particularly Saudi Arabia driving prices lower. Sustained weakness could ease inflationary pressures for consumers and central banks, offering a political win for President Trump, even as US’s sanctions on Rosneft and Lukoil keep product markets supported. Investors are also awaiting official US inventory data, after the API flagged another stock build.
Gold steadies as data delays and rate cut bets shape market outlook. Gold held steady near USD4,200/oz after a strong 2% rise yesterday, as the end of the six-week US government shutdown eased some uncertainty. The reopening remove the immediate operational freeze but still leaves investors waiting for clarity on when delayed jobs and inflation reports will resume. Gold has climbed nearly 5% this week as markets bet that once data flows restart, a softer US economic picture could justify additional rate cuts, which support the non-yielding metal. Still, divisions within the Fed persist, with some policymakers favouring a pause to curb inflation. Despite a pullback from last month’s record above USD4,380/oz, gold remains up almost 60% this year, underpinned by strong central bank demand and investors seeking a hedge against rising fiscal risks across major economies.
MIDDLE EAST - CREDIT TRADING
End of day comment – 12 November 2025. Mixed markets. The UST move higher which started yesterday did what it usually does and that's to widen spreads. At the same time the macro environment remains firm and bonds remain well bid in cash/yield terms. Selling flows are still outnumbering buying flows but you could argue with all the new issuance the market is seeing that this is to be expected. Talking of new issuance BOSUH will price at T+145bp for a 500mm 5y and DIBUH at T+90bp for a 1bn 5y sukuk. Both pricing 'on the curve'. FABUH announced a new 5y EUR with size and timing tbd. Back to secondary trading, spreads closed 2/3bp wider on average. Sovereign were less active on the IG side than usual but bids stepped up for long end QATAR (50s +0.50pt/+1bp) and ADGB (54s +0.5pt/+1bp) which outperformed the belly. In Quasi sovereign seen some activity in ADNOCN, ADQABU, ADGLXY and QPETRO mainly around the 5y point, with cash prices +0.125pt spreads were 2bp wider on average. In the corps space new ITTHAD 30s continued to outperform on local retail inflows. Liquidity on the offer side is slowly drying up closing +0.25pt/-3bp and starting to touch 101 in cash price from 100 reoffer.
MIDDLE EAST - MACRO / MARKETS
Turkey’s posts third consecutive current account surplus. Turkey recorded another current account surplus of USD1.11bn in September. This was achieved despite a sharp deterioration in the goods trade deficit, reflecting weaker core trade and a worsening gold balance. The strength of services income driven by rising tourism and transport revenues, helped limit the decline in the surplus. However, the 12-month rolling current account deficit increased to approximately USD20.1bn (about 1.5% of GDP), indicating that structural external pressures remain. Meanwhile, the capital account saw net outflows of around USD6.0bn, and official reserves fell by about USD8.7bn, driven by resident outflows and errors and omissions. Going forward, sustained improvement will depend on narrowing the trade gap, maintaining momentum in services, stabilising capital flows, and ensuring foreign-currency reserves stay adequate amid a still-challenging global environment.
Tunisia secured USD430 million World Bank support. Tunisia signed a USD430 million agreement with the World Bank to strengthen governance and reliability in its energy sector, marking a major step in the country’s push toward cleaner and more sustainable power systems. The five-year program, supported by USD30 million in concessional financing, will be carried out through the Tunisia Energy Reliability, Efficiency, and Governance Improvement Program (TEREG), aimed at improving electricity services and boosting the performance of the state utility STEG. The initiative will also accelerate renewable energy development, with Tunisia planning to mobilise USD2.8bn in private investment to add 2.8GW of solar and wind capacity by 2026, a move expected to generate jobs, support economic growth, and enhance long-term energy security. World Bank Director Alexandre Arrobbio said the program will help position Tunisia as a stronger clean-energy player while reinforcing transparency and efficiency across the sector.
