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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 steady ahead of US-Iran talks as geopolitical risks linger. Oil prices were little changed as markets awaited the resumption of US-Iran talks in Geneva, with Brent near USD68/b and WTI around USD63/b, following their first consecutive weekly declines this year. President Trump increased pressure on Iran by suggesting regime change would be the best outcome ahead of negotiations. Crude gained about 10% in 2026 amid heightened Middle East tensions, though prices have eased as the risk of immediate military action diminished and the International Energy Agency (IEA) lowered its global demand growth forecast. Markets are also watching Ukraine-related talks and potential Russian supply developments, while some OPEC+ members signalled possible output increases from April, with decisions likely influenced by the outcome of US-Iran negotiations.
Gold slips below USD5,000 as profit-taking follows inflation-driven rally. Gold fell below USD5,000/oz as investors took profits following a strong rebound triggered by softer than expected US inflation data, which reinforced expectations for Fed rate cuts. Gold dropped as much as 1.1% after gaining 2.4% in the prior session. Trading activity was relatively subdued with Chinese markets closed for the Lunar New Year, reducing liquidity during Asian hours, while authorities in Shenzhen warned against illegal gold-trading practices amid heightened speculative activity. Gold has surged to a record high above USD5,959/oz in late January before suffering a sharp two-day correction that briefly pushed prices below USD4,500. It has since recovered roughly half of those losses. Despite recent volatility, underlying support factors, including geopolitical tensions and expectations of easier monetary policy, remain intact.
MIDDLE EAST - CREDIT TRADING
End of day comment – 13 February 2026. Another day of UST strength (adding to the overnight move higher) setting the tone. Whilst cash prices moved higher, spreads are again wider. The market though didn't feel as weak as yesterday with flows tilted to buying bonds. It will take probably another 2/3 trading sessions to see where spreads are settling. For today IG looks another 2/4bp wider. ADGB again underperformed QATAR as the former has sticky cash price offers in long end like in 50s closing +0.375pt/+4b vs QATAR 49s closing +0.625pt/+2bp. Away from sovereign the corp world had news of the appointment of a new DPWDU CEO which saw offers getting lifted in 37s closing +0.375/+4bp. For the week the DPWDU curve widened 10/15bp and was at the end of the performance spectrum. On the new issue front MASQUH 6.25 perps had a good reception with some local retail interest keeping it bid, closing 100.125/100.50 with trades in a 100/100.375 range. I didn't see or had any trades in the new FABUH GBP closing those 100.125/100.375. Next week will see a US holiday, CNY, and half term in the UK, so would expect a quieter start.
MIDDLE EAST - MACRO / MARKETS
IMF urges tighter policy mix as Turkey advances disinflation efforts. The IMF concluded its Article IV consultation with Turkey, noting progress in the country’s disinflation program, with inflation declining from 49.4% y/y in September 2024 to 30.9% in December 2025, supported by fiscal consolidation, prudent income policies, and tight monetary policy, while GDP growth remained strong at an estimated 4.1% in 2025. Inflation is projected to ease further to 23% by end-2026, with growth expected at 4.2%, as the current policy mix balances disinflation and steady expansion, strengthens reserves, and maintains adequate current account financing. However, the IMF highlighted persistent vulnerabilities, including elevated external risks, exposure to energy price shocks, and still-high inflation, urging tighter macroeconomic stance, deeper fiscal consolidation below 3% deficit target, and broader tax reforms. The Board also emphasised vigilance in the financial sector, particularly regarding FX liquidity risks, and called for structural reforms to boost productivity, labour market outcomes, and SME development to support resilient medium-erm growth.
Lebanon seeks to bridge IMF gaps over bank reconstructing. Lebanon’s Prime Minister Nawaf Salam said the government is working to resolve differences with the IMF over a draft Financial Stabilisation and Depositor Recovery law aimed at gradually repaying depositors, including up to USD100,000 in cash over four years and larger amounts through central bank-backed bonds. The IMF has called for clearer alignment with international principles, particularly on the hierarchy of claims to ensure shareholders and junior creditors absorb losses before depositors, and for consistency with debt sustainability and available liquidity. During a recent visit to Beirut, IMF staff also stressed the need for amendment to the Bank Resolution Law and the adoption of a comprehensive medium-term fiscal framework to support bank restructuring, sovereign debt sustainability, and revenue mobilisation as Lebanon continues efforts to recover from its 2020 default and prolonged financial crisis.
