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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 declines on rising US stockpiles despite sanctions concerns. Oil prices fell as a sharp 4.4 million barrel increase in US crude inventories signalled rising supplies, outweighing worries about upcoming US sanctions on Russia’s Rosneft and Lukoil. Brent slipped toward USD64/b while WTI hovered near USD60/b, with inventories poised to reach their highest level in over five months if official data confirm the API report. Despite some Asian buyers pausing Russian purchases and stronger European diesel markets, broader fundamentals remain bearish. Global supply is expected to exceed demand, with the IEA forecasting a record glut next year driven by higher OPEC+ and non-OPEC production. Crude on tankers has surged to 1.4bn barrels, highlighting swelling supply as sanctions near. With the US government reopening, investors will also receive delayed market data, including accelerated release of the Commitments of Traders through late January.
Gold holds steady as markets weigh equity declines and Fed signals. Gold hovered near USD4,070/oz as investors balanced falling global equities, stretched tech valuations, and diminishing expectations for a near-term US rate cut. Nervousness ahead of Nvidia’s earnings kept risk sentiment fragile, while reduced Fed-cut bets limited support for the non-yielding metal. Markets are awaiting tomorrow’s delayed US jobs report for clues on economic momentum after the government shutdown. Despite recent cooling from last month’s record high, gold is still up ~55% this year, its strongest performance since 1979, driven by robust central bank buying and investor hedging against sovereign debt and currency risks. Upcoming FOMC minutes may offer insight into future liquidity measures, with any shift toward easier policy likely to further benefit gold.
MIDDLE EAST - CREDIT TRADING
End of day comment – 18 November 2025. Wider spreads, mixed flows. The good news is that the risk off in macro markets so far didn't affected GCC markets yet. Spreads were wider today but on the UST move only. The bad news however is that the market still feels stuck around recent new issuance where there are sellers but since no seller forces a trade, bonds/risk are not changing hands. As a result like mentioned yday technicals rule the price action and technicals are quite different depending where you look at. The other general observation is that the market is still not differentiating between credits. Higher beta names move in line with lower beta ones. IG sovgn was quiet today, seen some selling in recent ADGB 35s (-0.125pt/+2bp) and again long end bonds outperforming like QATAR 50s closing unch/-1bp. In higher beta names OMAN had a little wobble in the morning but came back in the afternoon to close mostly unch in cash, here as well long end is better bid than belly bonds. Fins had sellers in recent new issues led by new BOSUH 30s closing -0.125pt/+5bp. Overall fins feel weak with new issuance also leading to selling in outstanding senior bonds and perps.
MIDDLE EAST - MACRO / MARKETS
GCC inflation trends in October. Qatar’s inflation eased slightly in October, rising 1.11% y/y compare to 1.15% y/y in September. The subdued inflation reflects a stable consumer price environment, supported by Qatar’s fixed exchange rate and strong policy buffers. In Oman, inflation climbed to 1.5% y/y in October from 1.13% y/y in September. Oman’s inflation remains well contained, thanks to utility and fuel subsidies and the riyal’s peg to the US dollar, which restrain imported inflation pressure. Going forward, inflation is likely to stay within a 1-1.5% range through 2025, assuming no major external shocks or subsidy roll-backs. Meanwhile, Dubai’s inflation accelerated to 3.4% y/y in October up from 2.9% y/y in September, fuelled by increases in housing and utilities, and transport costs, although the latter had previously declined. These three Gulf economies readings reflect diverging inflation trajectories with outlooks suggesting subdued inflation cross the region in the absence of major shocks.
Moody’s affirms Lebanon at C amid deep fiscal and financial distress. Moody’s has affirmed Lebanon’s C issuer rating with a stable outlook, reflecting expectations that bondholder losses will exceed 65% following the country’s 2020 default and continued inability to restructure its debt. The affirmation comes despite political progress, such as the election of a new president and the formation of a new government, which has enabled key legislative steps toward a comprehensive restricting across the public sector, central bank, and commercial banks. Lebanon’s debt burden remains extremely high at 148% of GDP, with Eurobond liabilities rising to USD42bn, while the economy continues to face severe structural challenges, including high inflation, weak institutions, and strained basic services. The stable outlook signals that ratings are unlikely to change before restructuring is completed, as the country remains constrained by profound economic, social, and governance weaknesses that limit its ability to reduce risks or restore confidence in the near term.
