Saudi Arabia inflation at 2.3% y/y in August

Saudi Arabia recorded headline CPI inflation of 2.3% y/y in August, up from 2.2% the previous month (revised up from the initial reading of 2.1%). On a monthly basis, consumer prices were 0.1% higher, the same pace of growth as recorded in July. Annual inflation has averaged 2.2% y/y over the first eight months of the year, and we are holding to our forecast for an average of 2.0% over 2025, which would mark a modest acceleration on the 1.7% averaged in 2024. We anticipate a slowdown in price growth through the remainder of the year, and expect that mild inflationary pressures generally will remain supportive of robust consumer demand in Saudi Arabia, underpinning GDP growth.

Egypt’s production index logged y/y growth of 9.3% in July, recovering from the 5.5% contraction recorded the previous month. Growth has averaged 1.6% over the first seven months of 2025, a far stronger performance than the 0.7% averaged over the same period last year as business conditions in Egypt continue to improve.

In the US, Stephen Miran was confirmed as a Fed governor, in time for him to vote in the upcoming FOMC decision on Wednesday. In other Fed news, an appeals court has blocked President Donald Trump from firing Lisa Cook while she appeals.

Today’s Economic Data and Events

13:00 Germany ZEW survey, expectations, September. Forecast: 25.0

16:30 Canada CPI inflation, % y/y, August. Forecast: 2.0%

16:30 US retail sales, % m/m, August. Forecast: 0.3%

17:15 US industrial production, % m/m, August. Forecast: -0.1%

Fixed Income

• US treasuries continued to grind higher yesterday ahead of the expected rate cut from the Fed on Wednesday. Yields on the 2yr closed down 2bps at 3.5368% while the 10yr settled 3bps lower at 4.0375%.

FX

• The dollar index closed down 0.3% yesterday as expectations of a resumption of rate-cutting from the Fed on Wednesday run high.
• EUR closed up 0.1% at 1.1776, while GBP added 0.3% to 1.3599. JPY strengthened 0.2% against the USD to 147.40.

• TRY snapped a nine-day losing streak against the dollar to close 0.1% stronger yesterday as the court case around the opposition was postponed.

Equities

• There were further gains in US equities as rate-cut bets solidify. The Dow Jones, the S&P 500, and the NASDAQ added 0.1%, 0.5%, and 0.9% respectively.
• Locally, the DFM and the ADX both closed up 0.2%. Saudi Arabia’s Tadawul closed 0.1% lower.

• In Turkey, the BIST closed up 6.1% after the court case around the political opposition’s leadership’s legitimacy was postponed.

Commodities

• Oil prices saw further gains at the start of the week as the prospect of further sanctions on Russian energy remained in play, combined with the risk-on sentiment around the expected rate cut from the Fed.
• Brent futures closed up 0.7% to USD 67.4/b, while WTI added 1.0% to end the day at USD 63.3/b.