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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 falls as Trump delays strike deadline, extended uncertainty. Oil prices declined, with Brent slipping toward USD105/b and WTI near USD93/b, after President Trump extended the deadline for potential strikes on Iran’s energy infrastructure to early April, offering temporary relief to markets while prolonged uncertainty over the conflict. The delay creates additional space for diplomatic efforts and military buildup, even as tensions remain high and Iran maintains control over the Strait of Hormuz, severely restricting global energy flows. Despite the pullback, oil is still on track for a record monthly surge, with prices up nearly 50% amid supply disruptions and inflation concerns. While limited tanker movement and small diplomatic signals suggest potential de-escalation, risks remain elevated, with investors warning that a prolonged conflict could push oil prices as high as USD200/b and further strain the global economy.
Gold rebounds slightly as strike delay eases pressure. Gold recovered modestly to around USD4,400/oz after President Trump extended the deadline for a deal with Iran by 10 days, temporarily easing geopolitical tensions and supporting sentiment. The rebound follows a sharp nearly 3% drop in the previous session, though gold remains down about 17% since the war began, pressured by rising energy-driven inflation and expectations that central banks will hold or raise interest rates, typically negative for non-yielding assets. Additional downside pressure has come from central bank activity, including significant gold sales by Turkey, which have weakened a key pillar of recent demand. Despite the brief recovery, gold continues to face headwinds from both macroeconomic factors and shifting investor positioning.
MIDDLE EAST - CREDIT TRADING
End of day comment – 26 March 2026. It was a relatively quiet day up into the close where risk is coming off. During the day it felt a bit like a Friday, everyone knows that it will be difficult to move risk tomorrow ahead of the weekend, so playing defence starts on Thursday now. All said, for the weakness in global markets GCC bonds held extremely well. There were buyers especially in long end where the combination of spreads wider + yields wider over the past month eventually has made yields attractive in IG names. ADGB was most active and trades as I write at 96.6875 (+0.125pt/-5bp). I would put QATAR -3bp where I have seen more two-way interest and some sellers in 5y sovgn bonds and QPETRO 41s. OMAN was again very quiet and goes out unch in cash price (-5bp). Financial bonds were again overall for sale but saw some buyers coming in short end 27s/28s maturities and for the first time in a while there were some buyers/trades in short call AT1, but overall, there is still a full of weakness and better sellers, especially in newer issues.
MIDDLE EAST - MACRO / MARKETS
IMF Fifth and Sixth Reviews of Egypt. The IMF’s fifth and sixth reviews highlights that Egypt has achieved meaningful macroeconomic stabilisation under its reform program, with GDP growth recovering to about 4.4%, inflation falling sharply, and the external position strengthening due to exchange rate flexibility, strong remittances, tourism, and capital inflows. Fiscal consolidations and tighter monetary policy have helped rebuild confidence and increase foreign reserves, while progress under the climate-focused reform agenda has been solid. However, the report emphasised that deeper structural reforms remain uneven, particularly the slow pace of privatisation, continued large state involvement in the economy, and high public debt and financing needs, which constrain private sector development and long-term growth. Although most program targets have been met, some key areas such as divestment and debt reduction underperformed, requiring corrective measures. Looking ahead, the IMF stresses that sustaining stability will depend on accelerating reforms to reduce the state’s footprint, improve competition, strengthen debt management, and enhance revue mobilisation, while maintaining exchange rate flexibility and protecting vulnerable groups. Otherwise, downside risks from global conditions, regional tensions, and reform delays could undermine progress.
Kuwait Central Bank introduces stimulus measures to support liquidity and lending. Kuwait’s Central Bank has initiated stimulus packages in response to current geopolitical developments, introducing measures to support liquidity and lending in the banking sector. These include easing liquidity requirements, such as lowering the liquidity coverage ratio and regulatory liquidity ratio, while increasing the maximum limit for financing to encourage credit growth. Additionally, the central bank is allowing banks to use part of their precautionary capital buffers, effectively relaxing capital adequacy constraints to strengthen their capacity to absorb shocks and support economic activity. Last week, the UAE’s central bank also introduced similar measures to support liquidity and lending in the banking sector.
