US inflation slows in January

US CPI inflation slowed to 2.4% y/y in January, down from 2.7% in December and slower than the predicted 2.5%. Prices were 0.2% higher than a month earlier, the slowest monthly rise since July. Core inflation was at 2.5% y/y and 0.3% m/m, both in line with expectations with the annual rate the lowest since 2021. Shelter costs, a notable driver of inflation in recent years, was at just 0.2% m/m, the slowest rise since September. Expectations for rate cuts this year rose on the back of the slower-than-expected inflation data.

CPI inflation in Saudi Arabia slowed to 1.8% y/y in January, down from 2.1% in December. Prices were up 0.2% m/m. Housing & utilities, which has been a notable driver of Saudi inflation in recent years, slowed to 4.1%, down from 4.3% previously, while food & beverages was unchanged at 1.3% y/y.

In Dubai, the Roads and Transport Authority (RTA) has released statistics for 2025, showing that there were 802.1mn riders using public transport in the emirate last year, up 7.4% from the 747.1mn registered in 2024. There were 120mn individual taxi trips over the course of the year,

Today’s Economic Data and Events

No major data releases scheduled today

Fixed Income

• There was a significant rally in USTs on Friday on the back of weaker-than-anticipated inflation data. Yields on both the 2yr and the 10yr ended the day down by 5bps, and 3.4076% and 4.0483% respectively. Over the week, the 2yr was down by 9bps and the 10yr by 16bps.
• There are now around two and a half 25ps cuts now priced in by year-end. The US Federal Reserve is set to release the minutes from its last FOMC meeting on Wednesday.

FX

• The US dollar index closed down by 0.7% against its basket of peer currencies last week, though it was broadly stable through the second half after dropping 0.8% on Monday.
• EUR gained 0.5% over the week to close at 1.1868, while GBP gained 0.3% to close at 1.3651. JPY drove the bulk of USD’s losses, however, as it strengthened by 2.9% w/w to close at 152.7.
• TRY weakened by 0.2% w/w to 43.6894 while INR was broadly unchanged at 90.6400.

Equities

• US equity markets had a poor week last week, with all three benchmark indices closing lower. The Dow Jones, the S&P 500, and the NASDAQ lost 1.2%, 1.4%, and 2.1% respectively.
• Locally, the DFM added 0.6% w/w while the ADX gained 0.7%.

Commodities

• Oil prices closed lower w/w on Friday as concerns around US action in Iran faded. Brent futures ended the week at USD 67.8/b, down 0.4%, while WTI lost 1.0% to close at USD 62.9/b.
• Bloomberg has reported that some OPEC+ members see scope for a renewed rollback of oil production curbs in April, which would further raise concerns around an oversupplied market this year.
• Gold prices rose 1.6% last week to USD 5,042.03/troy oz, though there were some volatile daily swings over the period.