To read the full report, please download the PDF above.
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 extends losses as peace-plan talks ease risk and sanctions threaten supply disruptions. Oil fell for a third straight session, with Brent near USD63/b and WTI below USD59/b, as news that Ukraine President Zelenskiy agreed to work on a US and Russia-drafted plan eased some geopolitical risk ahead of imminent US sanctions on Rosneft and Lukoil. The proposed deal, which includes Ukraine ceding territory and sanctions removal, drew scepticism from European diplomats, but any real progress could add supply to an already oversupplied market heading into next year, with OPEC+ and American producers increasing output. The upcoming sanctions risk leaving 48 million barrels of Russian oil stranded at sea, and major buyers like India’s Reliance have begun seeking alternatives, underscoring the shifting dynamics in global crude flows. Looking ahead, markets will focus on whether peace efforts gain traction, how sanctions reshape trade flows, and whether oversupply pressures deepen into 2026.
Gold slips for the week as mixed US jobs data limits Fed cut expectations. Gold eased to about USD4,065/oz, heading for a modest weekly decline of 0.5%, after a mixed US jobs report provided little new justification for the Fed to cut rates. While September job growth exceeded expectations, rising unemployment and FOMC minutes signalling a preference to keep rates steady have reduced the odds of a December cut to roughly 40%. Higher-for-longer rates typically weigh on gold, tampering its appeal after a record run last month. Even so, gold remains up about 55% this year, on track for its strongest annual gain since 1979, fuelled by robust ETF inflows, central bank buying, and a broader shift away from sovereign debt and currencies, though the latest surge is now seen as stretched.
MIDDLE EAST - CREDIT TRADING
End of day comment – 20 November 2025. Mixed day at best again. Despite the better macro mood post NVIDIA and better DM credit markets, the morning was still dominated by sellers. Post US numbers and higher UST markets flows became much better balanced and ETFs are starting to be buyers. However the technicals in each bond are still strong and the main price driver. Broadly grouping it: Sovgn long end bonds are in demand. New issues are for sale. Belly bonds in Quasi/corps and fins are for sale too. Coming to new issues new SHARSK 36s traded around 99.625/6875 (-0.15pt/+3bp). New BOUSH 30s was down at 98.375 and remained offered (-0.125pt/+4bp). MUBAUH saw sellers from 33s to new 35s, closing this part also -0.25pt/+4bp. Overall volumes remain well below average as bonds don't seem to have found clearing levels yet. All said the spread widening this week has taken belly bonds now anywhere from 5bp to 10bp off the tights and should at some stage attract interest if macro markets remain supportive. Primary markets seem also to be quietening down, FABUH priced 1bn of AT1 NC6 at 5.875%/100.00. This one should see more retail interest that the latest senior bonds. Overall the market had again a weaker feel, but going out with more balanced flows.
MIDDLE EAST - MACRO / MARKETS
CBE Holds rate at 21% as inflation risks rise and policy turns more cautious. The Central Bank of Egypt (CBE) kept its policy rate unchanged at 21%, defying expectations of a cut, as it adopted a more cautious stance amid rising global and domestic inflation risks and slower easing cycles across major central banks. The CBE signalled a wait-and-see approach, emphasising the need for further improvement in underlying inflation, particularly stubborn services inflation, which has pushed monthly price pressures higher in September and October despite easing food prices. Economic activity remains solid, with GDP growth likely accelerating to 5.2% y/y in Q3 2025, driven by non-petroleum manufacturing, trade, and tourism, and the output gap moving closer to full capacity, which the CBE expected to reach by mid-2026. The sift in guidance implies no rate cuts this year, with easing expected to begin in Q1 2026, and brining rates to around 15%.
US-Saudi investment forum showcases deepening economic ties. The US-Saudi Investment Forum held on 19 November in Washington D.C brought together President Trump, Saudi Crown Prince Mohammed bin Salman, and top executives from leading American and Saudi companies to unveil a new wave of cross-border investment commitments. The event highlighted Saudi Arabia’s plan to boost its total investments in the US to USD1 trillion, while Aramco alone announced 17 MoUs worth over USD30bn spanning energy, advanced materials, technology and financial services. AI and digital infrastructure featured prominently, with Elon Musk and Nvidia CEO Jensen Huang discussing next-generation opportunities in the sector. The forum underscored KSA’s push to accelerate Vision 2030 diversification, expand beyond hydrocarbon and position the Kingdom as a global tech and investment hub, while offering US firms deeper access to one of the region’s fastest-growing economies.
