Egypt inflation slows in July

CPI inflation in Egypt slowed to 13.9% y/y in July, down from 14.9% in June. Prices were 0.5% lower than the previous month, driven by a 3% m/m fall in food and beverage prices. This marked the second month in a row than annual inflation in Egypt has slowed as the disinflationary trend has come back into play. We expect a further slowdown in price growth through the close of the year as subsidy adjustments implemented in H2 2024 pass through the base, which should allow the Central Bank of Egypt to further loosen monetary policy. Real interest rates are just over 10% with the latest fall in inflation and the CBE’s next MPC meeting is scheduled for August 28.

Consumer prices in China were unchanged from a year earlier according to the latest CPI inflation print which was at 0.0% y/y for July, compared with 0.1% the previous month. Meanwhile factory gate inflation was negative for the 34th month running with PPI inflation at -3.6% y/y, unchanged from June.

Today’s Economic Data and events

No major data releases scheduled today

Fixed Income

• The post-NFP rally in USTs was partly unwound last week, with yields settling higher across the curve. Yields on the 2yr ended Friday at 3,7624%, 8bps higher w/w, while the 10yr added 7bps to close at 4.2829%.
• Australia’s RBA is the most notable rate-setting decision this week, scheduled tomorrow with a 25bps cut predicted.

FX

• The USD lost ground last week with the dollar index ending the week down 1.0% against its basket of peers.
• GBP was a major gainer against the greenback after a hawkish cut from the Bank of England on Thursday and it closed up 1.3% over the week to 1.3452. EUR was up 0.5% to 1.1641, while JPY weakened by 0.2% to end the week at 147.74.

Equity Markets

• A strong performance from major tech companies led to considerable gains for US stock markets last week, with the NASDAQ in particular seeing strong upwards movement. It closed up 3.9% on the week for the strongest performance in several weeks. The Dow Jones added 1.4% while the S&P 500 closed 2.4% higher w/w.
• Locally, the ADX ended Friday down 0.1% w/w while the DFM closed up 0.6% on the week.

Commodities

• Reinvigorated negotiations between the US and Russia over Ukraine weighed on oil prices last week, as expectations of harsher sanctions on Russian energy weakened. Brent futures closed down 4.4% w/w on Friday at USD 66.6/b, while WTI fell 5.1% to USD 63.9/b.