G20 summit kicks off in Brazil

The G20 summit began in Brazil, with the UAE taking part as a guest for the fifth time. Crown Prince of Abu Dhabi Sheikh Khaled bin Mohamed has been attending on behalf of the UAE, and he pledged USD 100mn from the UAE towards the launch of the Global Initiative against Hunger and Poverty. Other topics under discussion at the event aside from alleviating poverty include taxation of the super-rich, climate finance, and a cease-fire in Gaza

Dubai’s headline CPI inflation slowed to 2.4% y/y in October, from 2.5% in September. This was the slowest pace of annual pace growth since August 2023. Prices were 0.2% higher in October than the previous month, compared with a flat monthly print in September. Over the year-to-date, annual inflation has averaged 3.3% y/y. A notable drag on price growth over the past couple of months has been the transport component of the basket, which accounts for nearly 10% of the total. In October, transport prices were down -10.6% y/y, following the -8.0% registered in September.On the other hand, housing, the largest component of the basket, was up 7.2% y/y in October.

CPI inflation data from Oman was also released yesterday, with headline price growth at 0.8% y/y in October, up from 0.4% the previous month. Housing and utilities costs were flat while food and beverage prices were up 3.5% y/y. Headline annual inflation has averaged 0.6% ytd, compared with 1.1% over the same period last year.

Today’s Economic Data and Events

14:00 Eurozone CPI inflation, % y/y, October final. Forecast: 2.0%

17:30 Canada CPI inflation, % y/y, October. Forecast: 1.9%

Fixed Income

• US treasuries rallied on Monday, with yields falling across the curve. On the 2yr, yields were down 2bps on Monday to close at 4.2802%, while the 10yr yield closed down 3bps at USD 4.4138%.
• Emirates NBD has mandated banks for a USD 5yr benchmark issue. Elsewhere SAIB has mandated banks for a USD benchmark perp.

FX

• The dollar index closed down 0.4% on Monday amidst thin data due this week. The greenback saw losses against all its major pairs saving the JPY which closed down 0.2% to 154.66 as BoJ Governor Kazuo Ueda was cautious about the timing of the next hike from the bank.
• Elsewhere, GBP added 0.5% to 1.2678 while EUR closed up 0.6% to 1.0598. AUD was the standout as it added 0.7% to 0.6508.

Equities

• East Asian equities were mixed to start the week, with the Hang Seng up 0.8% but losses elsewhere as the Shanghai Composite closed 0.2% lower and the Nikkei dropped 1.1%. In India, the Sensex closed 0.3% lower.
• Index performances were mixed later in the day. In Europe, the FTSE 100 (0.6%) and the CAC (0.1%) gained but there were losses elsewhere, while in the US the Dow Jones closed 0.1% lower but both the S&P 500 (0.4%) and the NASDAQ (0.6%) closed higher.
• Locally, the DFM and the ADX both ended down 0.6% on the first day of the week.

Commodities

• The weaker dollar was good news for oil prices with both benchmarks surging with the largest gains in five weeks.
• Brent futures climbed 3.2%, erasing the 2.1% drop seen on Friday to close at USD 73.3/b, the highest in over a week. WTI also added 3.2% to close at USD 69.2/b. Both benchmarks have seen marginal gains so far this morning in early trading.