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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 steadies as Trump’s escalation fuels demand concerns. Oil prices held steady, with Brent hovering above USD70/b and WTI above USD68/b, as markets digested President Trump’s latest tariff threats, including a 30% levy on imports from the EU and Mexico, which deepened trade tensions and dampened the energy demand outlook. While Brent gained 3% last week, crude remains ~5% lower for the year, weighed down by rising trade and supply-side concerns. Notably, Saudi Arabia breached its OPEC+ quota in June, raising crude production by 700,000b/d to 9.8million, with 70% of the additional supply exported. The International Energy Agency (IEA) warned of a significant supply glut, with oil demand growth downgraded to 700,00b/d this year, the slowest in 16 years outside the pandemic, and non-OPEC+ supply growing at double that pace. Meanwhile, Trump’s intensifying trade war and looming 1 August tariff keep investors on edge, while China’s upcoming economic data and OPEC’s market report may further guide sentiment this week
Gold gains on renewed trade tensions amid Trump’s tariff ultimatums. Gold climbed near USD3,370/oz, supported by haven demand as investors reacted to fresh tariff threats from President Trump, who declared a 30% duty on EU and Mexican imports starting next month. Gold rose 0.6% last week, with market attention focused on Trump’s ultimatum letters to key trading partners, including Canada and Brazil, ahead of a 1 August deadline. While some investors question the likelihood of widespread disruption, rising trade tensions continue to reinforce gold’s appeal as a safe haven. Gold has surged over 25% this year, fuelled by geopolitical risks, central bank purchases, and persistent uncertainty over Trump’s evolving trade policies.
MIDDLE EAST - CREDIT TRADING
End of day comment – 11 July 2025. Another quiet day. The market came in in the morning with Oman upgraded to investment grade by Moody’s and that provided some early action in the Oman curve. The curve tightened 10bp with most activity in long end bonds, 51s closing +1pt/-10bp. The belly is now sub 5% yield up to 2031s and the market started offering bonds in the afternoon without any activity though. The rest of the market was very quiet, Macro risk took a bit of a hit on Trumps tariff headlines which led to some selling mainly by ETF accounts. With the UST weakness outpacing the cash weakness though spreads still managed to close 1/2bp tighter, especially long end bonds are still finding yield buyers in QATAR and ADGB. The market though feels heavy again going out. Weekend news around EU tariffs will most likely set the tone Monday morning.
MIDDLE EAST - MACRO / MARKETS
EU removed UAE from AML Grey List, easing trade talks. The European Parliament has voted to remove the United Arab Emirates (UAE) from the EU’s anti-money laundering (AML) “grey” list, easing compliance burdens and paving the way for smother trade negotiations between the UAE and EU. The delisting, which will take effect in the coming weeks, reflects the EU’s acknowledgement of the UAE’s significant efforts to enhance its frameworks for combating money laundering and terrorism financing. The move follows the Financial Action Task Forces (FATF) decision to delist the UAE in 2024. The grey list status had been viewed by the UAE as a barrier in trade discussions, prompting high-level EU engagement to secure parliamentary support for the removal. UAE Minister of State Ahmed Ali Al Sayegh welcomed the outcome, reaffirming the country’s commitment to robust and future-ready AML/CFT systems and its ambition to deepen EU-UAE strategic ties.
Saudi opens stock market to GCC residents in major market reform. Saudi Arabia’s Capital Market Authority (CMA) has announced major regulatory changes allowing residents of Gulf Cooperation Council (GCC) countries, including expatriates, to directly invest in the Kingdom’s main stock market for the first time. Previously restricted to swap agreements or licensed intermediaries, access is now extended to both current and former residents of GCC states, streamlining account procedures and enhancing investor inclusivity. The move aligns with Vision 2030’s goal to diversify the economy, deepen capital markets and attract global capital. Alongside this reform, the CMA introduced broader regulatory updates, including allowing investment fund units to be distributed via licensed digital platforms and fintech firms, improved governance for fund managers transitions, and increased flexibility for REITs. The changes aim to boost market liquidity, transparency, and investor confidence, reinforcing Saudi Arabia’s ambition to become a regional financial hub.
