Industrial production accelerates in Saudi Arabia

Industrial production in Saudi Arabia rose 7.1% y/y in August, an acceleration from the 6.5% growth logged in July. The faster growth was driven in part by the mining and quarrying sub-index which saw y/y growth of 8.1%, up from 6.5% in July, as OPEC+ members including Saudi Arabia have accelerated their return of barrels to the market. Saudi Arabia produced 9.72mn b/d in August, up from 8.99mn b/d in August 2024. Mining & quarrying activity was up 2.1% m/m. Growth in manufacturing activity on the other hand slowed in August to 5.6% y/y, down from 7.0% in July. This was supported by an 8.9% expansion in the manufacture of coke & refined petroleum products.

Turkish industrial production rose 0.4% m/m in August, compared with a 1.7% decline in July. On an annual basis, August production was up 7.1% y/y, from 5.2% the previous month. Manufacturing was up 7.7% y/y, while mining & quarrying rose 2.6%.

The US government shutdown continues to impact data releases, with yesterday’s scheduled initial jobless claims figures the latest to be delayed. However, the BLS has reportedly recalled staff to help prepare the September CPI inflation report which is due later this month, potentially giving the FOMC some information to factor into its rate-setting decision at the close of October.

Today’s Economic Data and Events

18:00 US University of Michigan sentiment index, October. Forecast: 54.0

Fixed Income

• US treasuries sold off across the curve yesterday. Yields on the 2yr rose 1bps to close at 3.5927%, while the 10yr yield closed 2bps higher at 4.1384%.

FX

• The dollar gained for the fourth session in a row yesterday, taking the dollar index back to levels last seen in early August.
• Gains were broad based against its peers, with political concerns weighing on the EUR and JPY in particular. The Euro fell to a two-month low of 1.1564, down 0.6%, while JPY weakened by 0.3% to close at 153.07. GBP ended the day 0.8% lower at 1.3304.

Equities

• US equities sold off yesterday amid concerns around stretched valuations after the recent rally. The NASDAQ, the S&P 500, and the Dow Jones fell 0.1%, 0.3%, and 0.5% respectively.
• Locally, the DFM closed down by less than 0.1%, while the ADX closed up 0.1%. In Saudi Arabia the Tadawul closed up 0.2% on the last day of its trading week, contributing to a 0.8% w/w gain.

Commodities

• Oil prices fell sharply yesterday amid optimism around the Middle East peace process and what that might mean for supply.
• Brent futures closed down 1.6% at USD 65.2/b, while WTI ended the day 1.7% lower at USD 61.5/b.

• Gold dipped back below the 4,000 mark as investors locked in gains, with prices falling 1.6% yesterday to close at USD 3,976.9/troy oz.