Egypt's economy accelerates in first calendar quarter

Egypt recorded real GDP growth of 4.8% y/y in the quarter ending March 31, the third quarter in fiscal 2024/25. This marked the strongest pace of annual growth in three years and compares with a 2.1% growth rate in the same period last year and 4.3% in the previous quarter ending December 31. We had pencilled in a 5.0% expansion for this quarter given the improvement in the PMI surveys at the start of the year and the ongoing easing in conditions as the IMF reform programme is followed, and we maintain our full-year forecast for 4.2% growth, up from 2.4% last year. Manufacturing saw robust growth of 10.9% y/y while accommodation & food services rose 23.0%. The Suez Canal remains a drag on activity, and there were also substantial declines in mining & quarrying, petroleum, and gas.

Retail fuel prices in the UAE will rise in July as oil prices were higher on average in June than they were a month earlier and refining margins also widened. Prices for mid-grade petrol will be 4.5% higher m/m at AED 2.58/litre while higher-grade petrol will be 4.7% higher at AED 2.70/lite. Diesel prices are up 7% m/m at AED 2.63/litre. The July fuel prices represent a monthly jump but on an annual basis fuel prices in the UAE have been consistently lower in 2025. Mid-grade petrol prices have been lower by an average of almost 19% y/y in the first seven months of the year, helping to keep transport costs in Dubai’s CPI lower in annual terms each month this year.

The population of Abu Dhabi rose by 7.5% in 2024 to reach 4.14m and representing growth of more than 50% since 2014. The median age of Abu Dhabi residents was 33 with more than 50% concentrated in the economically active 25-44 year old demographic bracket. Along with the population date the Statistics Centre of Abu Dhabi reported a working age population of 2.76m as of Q3 2024, up 9% y/y with strong growth of 11% y/y in the blue collar employed population, reflecting strong levels of project spending in the Emirate. The white collar employed population rose by 6% y/y to 1.2m.

Türkiye recorded a trade deficit of USD 6.65bn In May, wider than markets had been expecting. Exports were higher by 2.6% y/y at USD 24.8bn while imports rose 2.7% to USD 31.5bn. In other data from Türkiye the unemployment rate dropped to 8.4% in May, down from 8.6% a month earlier. The overall labour participation rate was steady at 53.5%.

Industrial production in India rose by 1.2% y/y in May, the slowest pace since August last year and a slowdown from the 2.6% growth estimated for a month earlier. Manufacturing output slowed to 2.6% y/y in May from 3.1% in April while mining and electricity output both declined y/y. Within manufacturing, both consumer durables and non-durables declined y/y along with primary goods.

Inflation in Germany decelerated to 2% in June from 2.1% a month earlier while French inflation was moderately faster than expected. Elsewhere in the Eurozone Italian inflation was steady at 1.7% in a preliminary print of June data.

Today’s Economic Data and Events

11:00 TU S&P Global/ICI Turkey Manf. PMI June

13:00 EC CPI y/y June: forecast 2%

18:00 US ISM manufacturing June: forecast 48.7

18:00 US JOLTS job openings May: forecast 7.3m

Fixed Income

US Treasuries ended June on a stronger footing with a drop in 2yr UST yields of 3bps, to close at 3.7192%. The 10yr UST yield fell by almost 5bps to 4.228%. Markets are growing more confident of a September rate cut from the Fed with another 25bps cut fully priced in.

RAK Bank has mandated banks for a USD 300m non-callable perp AT1 issuance.

National Bank of Kuwait has also mandated banks for a USD benchmark ATI issuance while Qatar Insurance Co has also mandated banks for a USD perp.

FX

The US dollar lost ground against peer currencies at the end of the month with a drop of 0.5% in the DXY index. EURUSD rallied almost 0.6% to 1.1787 while USDJPY pulled lower by 0.4% to 144.03 and GBPUSD managed a more muted 0.1% gain to 1.3732. Swiss franc and commodity currencies were the standout performers with USDCHF lower by 0.7% at 0.7931 while AUDUSD added 0.8% to 0.6581, NZDUSD adding 0.7% at 0.6096 while USDCAD dropped by 0.6% at 1.3608.

Turkish lira pulled stronger overnight with a dip of 0.2% at 39.8135 while Indian rupee was moderately weaker at 85.765.

Equities

US equity markets had a strong session overnight with gains of 0.6% in the Dow Jones while the S&P 500 and NASDAQ both rallied 0.5%. European stocks, however, closed weaker.

Regional markets had a strong close with the DFM up 0.4% while the ADX added nearly 1%. In contrast the Tadawul was 0.4% lower.

Commodities

Oil markets were broadly stable at the start of the week with Brent expiring at USD 67.61/b and the new month trading at around USD 66.40/b. WTI was lower by 0.6% at USD 65.11/b. Oil markets are squarely looking ahead to the next OPEC+ meeting that is due over the coming weekend.