UAE CEPAs with Australia and Malaysia Enter Force

The UAE’s Comprehensive Economic Partnership Agreements with Australia and Malaysia came into force on October 1, 2025, marking pivotal milestones in economic cooperation. The UAE-Australia CEPA, Australia’s first trade agreement with a MENA country, aims to increase bilateral trade from USD 4.2bn in 2024 to over USD 10bn by 2032. In the first half of 2025, UAE-Australia trade reached USD 3.03bn, up 33.4% y/y. The UAE-Malaysia CEPA, Malaysia’s first agreement with a GCC nation, targets growth from USD 5.5bn to USD 13.5bn by 2032, with first-half 2025 trade at USD 3.3bn, up 30.9%. Both agreements reduce trade barriers, enhance customs procedures, and promote private sector collaboration in key sectors including renewable energy, infrastructure, technology, healthcare, and artificial intelligence. These CEPAs are integral to the UAE’s economic strategy, targeting USD 1 trn in total trade and doubling its economy to USD 800bn by 2031, with 31 agreements concluded to date.

Eurozone inflation rose to 2.2% y/y in September, up from 2.0% in August, driven by energy base effects and persistent services costs at 3.2%. Core inflation remained steady at 2.3% for the fifth consecutive month, indicating contained underlying price pressures. The European Central Bank, having cut rates eight times to reach a 2% deposit rate, plans to hold steady at its October 30 meeting. ECB President Christine Lagarde described inflation risks as “quite contained,” with current policy settings “in a good place.” Forecasts project inflation will decline to 1.7% in 2026 before recovering to 1.9% in 2027.

Saudi Arabia’s crude exports jumped to 6.42m barrels daily in September, the highest in 18 months, up 600k barrels from August. The surge reflects OPEC+ production hikes finally reaching markets after summer domestic consumption subsided. Shipments via Egypt’s Sumed pipeline hit levels not seen since March 2020.

Today’s Economic Data and Events

13:00 Eurozone Unemployment Rate. Aug Forecast: 6.2%

16:30 US Initial Jobless Claims Sep 27 Forecast: 225k

Fixed Income

Bahrain successfully raised USD 2.5bn through a USD 1.5bn 8-year Sukuk at 5.875% yield and a USD 1bn 12-year conventional bond at 6.625% yield.

US Treasury yields moved lower on Wednesday. The 2-year UST declined 7 bps to 3.5347% while the 10-year yield fell 5 bps to 4.0981%

FX

The DXY index closing down 0.1% at 97.706. EURUSD closed flat at 1.1732 while GBPUSD rose 0.2% to 1.3446. USDJPY declined 0.56% to 147.07.

Equities

On Wednesday, all three major U.S. stock indexes closed higher. The Dow Jones Industrial Average rose 0.1%, the S&P 500 gained 0.3%, and the NASDAQ climbed 0.4%

Locally, DFM rose 0.8% while ADX edged up 0.1%. Saudi Arabia’s Tadawul closed up 0.2%.

Commodities

The G7 countries are nearing an agreement to significantly increase sanctions on Russia and target its oil exports.

Brent crude closed down 2.5% at USD 65.35/b and WTI closed down 1% at USD 61.78/b.

Gold closed up 0.2% to USD 3856.74/troy oz. Silver rose 1.4% to 47.32/troy oz.