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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 prices edge higher as tariff talks gain momentum. Oil prices rose slightly as investors monitored progress in US trade negotiations with key partners. Brent approached USD69/b and WTI hovered near USD66/b following a three-day decline. Market sentiment improved after President Trump announced tariff agreements with the Philippines (19%) and Japan (15%), lifting Asian stocks and US futures. Treasury Secretary Scott Bessent said upcoming talks with China in Stockholm may lead to extending the August 12 trade deadline and could include discussions on China’s sanctioned oil purchases from Russia and Iran. Despite this rebound, oil remains under pressure, with Brent still down 8% YTD due to tariff-driven demand concerns and rising OPEC+ output. Market signals such as Brent’s narrowing prompt spread also point to softening fundamentals.
Gold slips as US-Japan trade deal eases market nerves. Gold prices edged lower after a three-day rally, following President Trump’s announcement of a trade agreement with Japan that includes a 15% tariff and a USD550bn investment pledge. The deal signalled progress in broader trade talks ahead of the looming August 1 deadline, reducing demand for safe-haven assets like gold. Spot prices dipped 0.3% to around USD3,422/oz, while the dollar firmed slightly. Despite this pullback, gold remains up about one-third YTD, buoyed by ongoing global trade tensions and geopolitical conflicts. Investors are also watching upcoming US-China trade talks and Fed’s policy outlook, with recent comments from Treasury Secretary Scott Bessent calming fears over the central bank’s independence. Treasury yields declined, offering mild support to gold, which benefits in low-rate environment.
MIDDLE EAST - CREDIT TRADING
End of day comment – 22 July 2025. A slightly more active trading day today. Z-Spreads close roughly unchanged, the morning saw more balanced flows and it felt like more sellers were coming out. But the afternoon had mostly buyers. Overall GCC bond yield vol is still lower than UST yield vol and G-spread moves are more a function of UST moves. IG closing 1bp wider with some morning sellers in QATAR long end but the afternoon saw some price recovery, QATAR 49s is still outperforming closing +0.25pt/unch. ADGB had little activity, 49 saw some buyers and outperformed closing +0.25pt/unch. In higher beta names OMAN had early morning sellers and was 5bp wider at some stage but here as well selling made place for some afternoon buying, 47s closing +0.125pt/+1bp. MOROC also closed broadly unchanged in z spread with afternoon buyers in long end 42s and 50s. Fins were very quiet with light activity in QNBK 30s closing 99.625/875 unch/+3bp. In corps DPWDU continues to have a good bid, 33s still haven't found offers and outperformed closing +0.25pt/-1bp.
MIDDLE EAST - MACRO / MARKETS
Saudi delegations heads to Syria for USD4bn investment push despite regional tensions. A Saudi delegations of over 120 officials and investors will visit Damascus on 23 July to sign investment deals reportedly worth around USD4bn, despite recent violence in Syria and Israeli airstrikes. The delegation, led by Investment Minister Khalid AL-Falih, will participate in a Saudi-Syrian investment forum aiming to promote cooperation across energy, technology, education, health, and industry. Agreements will include launching a white cement plant near Damascus. The visit underscores Saudi Arabia’s efforts to strengthen economic ties with Syria following earlier talks between Syria’s interim President Ahmed Al-Sharaa and Saudi Crown Print Mohammed Bin Salman. The Saudi Ministry of Investment also pledged to work with Syrian partners to overcome investment challenges. In addition, Saudi Arabia and Qatar have also announced on 27 April that they will settle approximately USD15 million in Syria’s arrears to the World Bank, paving the way for the country to regain access to concessional international financing,
Egypt and QIA finalise USD4bn north coast tourism megaproject. Egypt and the Qatar Investment Authority (QIA) are finalising a major USD4bn tourism development project in the Alamein region on Egypt’s north coast according to Asharq Business. The project, agreed upon during a recent meeting between Egyptian Prime Minister and Qatari Prime Minister, will be built under a usufruct agreement, with the Egyptian government providing infrastructure. The first phase will span 20-25% of the total area, and upon full completion, Egypt is expected to receive 15% of the project’s revenue. Licensing and land allocation are underway, with an official announcement expected later in 2025. This project is part of Qatar’s broader USD7.5bn investment pledge in Egypt, as Cairo targets USD42bn in FDI in the 2025-2026 fiscal year.
