Saudi inflation remains at 2.2% in October

CPI inflation in Saudi Arabia was unchanged at 2.18% y/y in October, moderately stronger than the 2.0% average over the first 10 months of the year but down from 2.3% in August. Prices were 0.3% higher than a month earlier, compared to the -0.1% m/m print seen in September. The housing component of the CPI basket remained the primary driver of price growth as it rose by 4.5% y/y. However, this was down from 5.2% in September, and within housing, actual rents were up 5.7% compared with 6.7% previously. The slowdown is likely being driven by recently introduced government measures to temper housing inflation, including a rent cap, and we expect that price growth will continue to moderate through the coming months – we forecast an average CPI inflation pace of 1.6% y/y in 2026, from a projected 2.0% this year.

The preliminary print of UK GDP suggests that the economy grew only very marginally in the third quarter of 2025, recording a 0.1% q/q rise. Growth in Q3 slowed, after reaching 0.3% q/q in Q2, with rising concerns about the possibility of tax hikes in the upcoming Autumn budget. There was also a sizeable – if temporary- hit to manufacturing activity in September, after Jaguar Land Rover was affected by a cyber-attack, with motor vehicle manufacturing falling 28.6% m/m. This was reflected in September’s industrial production print, which fell 2.0% m/m.

Chinese retail sales rose 2.9% y/y in October, slightly slower than the 3% growth recorded in September, marking the fifth consecutive month of slower growth. Industrial production came in weaker than expected, rising 4.9% y/y in October, a sharp reduction from the 6.5% print the month prior.

Today’s Economic Data and Events

• 14:00 EC GDP (Q3 Second estimate). Forecast: 1.3% y/y

Fixed Income

• US Treasury yields rose on Thursday, as doubts about a Fed rate cut in December rose, with odds of a cut dipping below 50% from over 60% at the start of the week. The 2yr yield rose 2bps to 3.5909%, while the 10y yield increased 5bps to 4.1192%.
• There were widespread gains in European bond yields on the day, with both the 10yr Gilt and Bund yields increasing by 4bps to 4.436% and 2.686%, respectively.

FX

• The dollar weakened against a basket of peer currencies on Wednesday, with the spot index 0.3% lower. EURUSD rose 0.3% to 1.1633, while GBPUSD increased 0.4% to reach 1.3192. USDJPY fell 0.15% to 154.56.
• In emerging markets, USDTRY gained 0.4% to 42.2714, while USDEGP fell by just under 0.1% to 47.2.

Equities

• US equity markets sold off on Thursday, driven by lower tech stocks and declining odds of a December rate cut. Both the Dow Jones and S&P 500 fell 1.7%, while the NASDAQ declined by 2.3%.
• There were also falls across major European equity markets after several disappointing earnings reports. The Eurostoxx 50 fell 0.8%, the FTSE 100 dropped 1.05%, the CAC 40 declined 0.1% and the DAX fell 1.4%.
• In the UAE, the DFM fell 0.8% and the ADX declined by 0.8%. The Tadawul dropped 0.7%.

Commodities

• The prospect of previously announced US sanctions on Russian oil companies coming into force over the next few days weighed against forecasts from the IEA suggesting oil supply is likely to exceed demand by over 4 million barrels a day in 2026. Brent futures rose 0.5% to USD 63.01/b and WTI increased by 0.3% to USD 58.69/b.
• Gold prices fell 0.6% to USD 4,171.52/troy oz, while silver declined by 1.8% to reach USD 52.30/troy oz.