UAE Strengthens Trade Ties with Cyprus and Gabon

HE Dr. Thani Al Zeyoudi, minister of foreign trade led a delegation to Cyprus, meeting President Christodoulides and establishing the UAE-Cyprus Business Council through an MoU. Non-oil bilateral trade reached USD 176m in January-September 2025, up 39.4% y/y. Cyprus serves as a strategic EU gateway for UAE businesses, while UAE investments support Cyprus’s green energy and infrastructure sectors. With nearly 1,850 Cypriot companies operating in the UAE, both nations aim to deepen private sector engagement across energy, logistics, real estate, technology, and AI.

HE Dr. Al Zeyoudi also visited Gabon, meeting President Oligui Nguema and key ministers to discuss collaboration in energy, mining, logistics, and digitalization. UAE-Gabon non-oil trade surged 36.9% to USD 238.1m in January-September 2025 compared to 2023. The visit advances the UAE’s CEPA program across Africa, with five African nations already concluding agreements. UAE-Africa non-oil trade reached USD 112bn in 2024, up 34% y/y, while UAE investments in the continent totaled over USD 110bn between 2019 and 2024.

India’s CPI accelerated to 0.71% in November from October’s record low of 0.25%, driven by higher prices for vegetables, eggs, meat, fish, spices, and fuel. The favorable inflation outlook enabled the Reserve Bank of India to cut policy rates by 25 basis points last week to support growth. The RBI forecasts inflation at 2% for fiscal year 2026.

China’s November economic data revealed widespread weakness, with retail sales growing just 1.3% y/y, the slowest since the Covid crash and missing forecasts of 2.9%. Industrial production climbed 4.8% while fixed-asset investment shrank 2.6%, worse than the expected 2.3% decline. Fading government trade-in subsidies hit consumer spending hard: home appliances plunged 19% and car sales fell 8.5%, the steepest drop in ten months. Even the extended Singles’ Day festival failed to boost confidence.

Today's Economic Data and Events

13:30 India Trade balance Nov Forecast: USD 34.2bn

17:30 US Empire manufacturing Dec Forecast: 10.0

17:30 Canada CPI Nov Forecast: 2.3% YoY

Fixed Income

US Treasuries ended the week on a weaker footing following hawkish commentary from Fed officials. Chicago Fed President Austan Goolsbee, who voted against the rate cut, said he has been “uncomfortable front-loading too many rate cuts” and prefers to wait for more inflation data. The 10yr UST yield rose 3bps to 4.18% while the 2yr yield fell 2bps to 3.52%. Markets are pricing in around two rate cuts for 2026, more than the Fed’s official projection of one. The Fed announced plans to begin purchasing approximately USD 40bn of short-dated Treasury bills to ease money market strains, a measure that should cap upward pressure on short-term yields.

FX

The US dollar hovered near two-month lows on Friday, booking a third consecutive weekly decline as the Federal Reserve's rate cut and less hawkish outlook weighed on sentiment. EURUSD added 0.1% to 1.1744 while GBPUSD pulled back by 0.15% to 1.3372. USDJPY edged higher by 0.14% to 155.75, with the yen under pressure ahead of the Bank of Japan's policy meeting this week. USDCHF was higher by 0.18% at 0.7954.

In commodity currencies, AUDUSD was lower by 0.16% at 0.6655 while NZDUSD slipped 0.04% to 0.5807. USDCAD was marginally lower by 0.03% at 1.3769.

Equities

US equities pulled back sharply on Friday as investors continued to exit technology stocks. The S&P 500 fell 1.07% to 6,827.41 and the Nasdaq Composite declined 1.69% to 23,195.17. The Dow Jones Industrial Average finished down 0.51% at 48,458.05 after earlier hitting an intraday all-time high. For the week, the S&P 500 lost 0.6%, the Nasdaq fell 1.6%, while the Dow gained 1%.

European markets closed lower with the EuroStoxx declining 0.6% and the FTSE losing 0.6%.

Local markets were mixed on Friday. The DFM General Index was marginally lower by 0.04% at 6,097.47, while the ADX fell 0.17% to 9,988.71. On Sunday, the Tadawul was lower by 0.09% to 10,715.98.

Commodities

Oil markets remained under pressure on Friday amid expectations of a growing global supply surplus. Brent futures fell 2% to USD 61.1/b while WTI declined 2% to USD 57.3/b, with both benchmarks hovering near seven-week lows.

Gold rose 0.4% to USD 4,298/oz on Friday, supported by expectations of further Fed rate cuts and a weaker dollar. The precious metal touched a seven-week high during the week, with ongoing central bank buying providing structural support.

Silver surged to a new all-time high of USD 64.65/oz before pulling back around 3% to close near USD 62/oz. Silver has more than doubled in value this year, up over 100%, driven by robust ETF inflows, strong retail demand, and structural industrial demand from solar, EVs and data infrastructure.