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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 slips on Greenland jitters and glut fears ahead of IEA outlook. Oil prices as President Trump’s push to annex Greenland rattled broader markets and investors awaited fresh guidance on the global supply-demand balance from the International Energy Agency (IEA). Brent slid toward USD64/b and WTI dipped below USD60/b as the dispute strained US-EU relations, dampening risk appetite and keeping volatility elevated. Crude remains under pressure from expectations that supply will outpace demand this year, with the IEA set to release its monthly outlook and its chief warning that abundant US and global output could weigh on prices for years. Venezuelan flows are also being re-routed after recent US intervention. While the administration plans 10% tariffs on eight European nations over Greenland, raising renewed trade-friction risks, near-term tightness persists, with prompt spreads in backwardation and disruption at Kazakhstan’s Tengiz field and constrained loadings at the Caspian Pipeline Consortium supporting the physical market.
Gold hit record highs as Greenland crisis fuel haven demand. Gold surged to fresh record highs while silver hovered near an all-time peak as escalating tensions over President Trump’s push to take control of Greenland and a sharp selloff in Japanese government debt drove investors toward safe-haven assets. Gold jumped to around USD4,844/oz with silver trading above USD94/oz. The US threat to impose tariffs on eight European nations opposing the Greenland move has raised fears of a damaging transatlantic trade war, weakening the dollar and rattling global markets. At the same time, turmoil in Japan’s sovereign bond market has intensified concerns over fiscal sustainability in major economies, reinforcing the so-called debasement trade in which investors shun currencies and government debt in favour of hard assets.
MIDDLE EAST - CREDIT TRADING
End of day comment – 20 January 2026. A bit of a roller coaster post the weekend Greenland induced global market volatility. It has to be said compared to other risk markets the moves in my space were rather orderly so far. All said the market is starting to trade with a widening bias again, not only on risk sentiment but flows are turning to more sellers, especially from RM side. Today we hit the lows/wides late morning before seeing a bit of a turn in UST and also in ETF flows flipping to buyers from morning sellers. On balance the market is going out 1/2bp wider on average. Higher beta credits are coming into play, today OMAN long end was active which at one stage was 1pt lower before recovering late, 47s-51s going out -0.625pt/+1bp, belly bonds closed -0.125pt/-0.25pt/+3bp. New issue activity has abruptly stopped, not had a new issue announcement since Thursday in my universe and if global market volatility continues we might hit a bit a pause in new issuance. All eyes will be on Trump in Davos tomorrow.
MIDDLE EAST - MACRO / MARKETS
Saudi bond issuance tops USD20bn in record January as banks and firms tap global markets. Saudi Arabia has sold more than USD20bn of international bonds since the start of the year, marking a record for January as the government, banks, and companies step up fundraising amid tightening domestic liquidity and strong credit demand driven by Vision 2030. The government led with an USD11.5bn dollar bond sale that drew USD28bn of demand, followed by issuances from Saudi Electricity and Saudi Telecom, while major banks including Saudi National Bank, Riyad Bank and Al Rajhi each raised at least USD1bn. Banks are increasingly turning to global debt markets as deposit growth slows and higher capital requirements take effect, while corporates are taking advantage of attractive pricing and rising Asian investor demand. Although the finance ministry has signalled a slowdown in sovereign issuance this year, targeting USD14-17bn, Saudi Arabia has a history of exceeding funding plans, with market forecasts pointing to another year of heavy international borrowing Lat year, the Kingdom issued about USD27bn of international debt, making it one of the largest sovereign borrowers in emerging markets.
Oman and Dubai inflation trends. Oman’s annual inflation rate eased to 1.6% y/y in December, down from 1.7% y/y in November, driven mainly by slower increases in transport costs and slight declines in some service categories, while food and non-alcoholic beverages and miscellaneous goods continued to register price increases. Other CPI components such as housing utilities, clothing, communication, and health services remained broadly stable, and monthly prices edged down by 0.1%, pointing to contained short-term inflationary pressures. In contrast, Dubai’s CPI inflation accelerated to 3.0% y/y from 2.7% y/y, led by higher transport and food prices, with transport inflation picking up due to elevated petrol prices, while the housing components, the largest weight in the CPI basket, continued to moderate, helping to offset some of the upward pressure and suggesting that although near-term cost pressure rose, underlying price momentum was beginning to stabilise.
