US consumer spending remains strong

US household spending remained strong in July, with nominal retail sales rising 0.5% m/m. This follows upward revisions to both the May and June prints. Out of the thirteen product categories, nine recorded an advance. Motor vehicle and part sales saw the largest gains, rising 1.6% m/m, with online sales and general merchandised trade also seeing strong growth.

The continued strong consumption pattern seen amongst households may however be at risk, with recent signs of a weaker labour market and a downward shift in consumer sentiment. The provisional print of the University of Michigan consumer sentiment survey fell unexpectedly in August, declining to a value of 58.6 from 61.7 in July. While there were declines in both the current and expected conditions components, the former saw a markedly more significant drop, declining by almost 7 points. The deterioration in sentiment appears to have been driven by renewed inflation concerns, with respondents highlighting their intention to reduce spending on items that have seen price hikes. One-year ahead inflation expectations rose to 4.9%, up from 4.5% the month prior.

US industrial production fell 0.1% m/m in July, marginally weaker than consensus expectations. The decline in the headline was driven by a fall in mining and utilities output, which fell 0.4% m/m and 0.2% m/m, respectively. Manufacturing output was flat on the month.

The Abu Dhabi Chamber of Commerce and Industry (ADCCI) reported a 10.3% y/y rise in the issuance of certificates of origin between June 2024 and June 2025. This rise in certificates is consistent with the increase in non-oil exports seen in the Emirate in the first half of the year. The certificates were issued across a range of sectors, including chemical, metals and engineering industries.

An August survey of market participants by the Central Bank of Turkey, showed a reduction in one-year ahead inflation expectations, dipping to 22.8% from 23.4% in July.

Ports in Oman have experienced significant growth in both ship traffic and cargo handling in the first half of 2025, relative to the same period in 2024. The number of ships calling at Omani ports rose just over 11% y/y in H1 2025, while the number of containers handled rose by 11.7% y/y.

Today’s Economic Data and Events

• No key data releases

Fixed Income

• US treasuries fell on Friday, after a week of mixed economic data points. Yields on the 2yr bond rose 2bps on the day but ended the week 1bps lower, at 3.7505%. The 10yr yield ended both Friday, and the week as a whole, 3bps higher, at 4.316%.
• Friday also saw a widespread sell-off in European bond markets. European yields likely rose on the back of public holidays exacerbating already-thin liquidity, and concerns about Dutch pension reform. The 10yr Bund yield rose almost 8bps to 2.786%.

FX

• The dollar weakened against a basket of peer currencies on Friday, as markets continue to expect a rate cut by the Fed at its September meeting, despite mixed economic news last week. The dollar spot index fell 0.4%. EURUSD reversed Thursday’s move, gaining 0.5% to reach 1.1703. GBPUSD rose 0.16% to 1.3554, and USDJPY fell 0.4% to 147.19.
• In emerging markets, USDTRY gained 0.04% on Friday to reach 40.8526 while USDZAR fell marginally to 17.5923.

Equities

• Equity markets fell back on Friday, dented by a decline in August consumer sentiment. The S&P 500 fell 0.3%, the NASDAQ declined 0.4% and the Dow Jones gained 0.1%. Over the course of the week as a whole, growth in equity markets was still positive, with the Dow Jones up 1.7%, the S&P 500 0.94% higher and the NASDAQ up 0.8%.
• Moves in European equity markets were mixed on Friday. The EuroStoxx 50 rose 0.3%, the CAC 40 gained 0.67%, the DAX declined 0.1% and the FTSE 100 fell 0.4%.
• In the UAE, the DFM rose 0.5% while the ADX was 0.4% lower.

Commodities

• Oil prices resumed their downward trajectory on Friday after rising on Thursday. Brent futures declined by 1.5% to USD 65.85/b while WTI fell by 1.8% to USD 62.8/b. After meeting with President Putin on Friday, President Trump indicated that he would hold off applying higher tariffs on Chinese goods in retaliation for their purchase of Russian oil.
• Gold prices were broadly flat on Friday at USD 3,336.19/troy oz.