Investment platform launched for UAE manufacturing SMEs

The Emirates Development Bank, together with Abu Dhabi Export Office, will launch an AED 1bn investment platform, designed to support SMEs businesses in a variety of strategic sectors such as manufacturing, advanced technology and food security. The agreement, signed on the sidelines of the “Make it in the Emirates” forum, will give funding priority to firms already exporting and those with export potential.

The April US Conference Board leading indicator fell by the most in two years, declining 1.0% m/m from a downwardly revised 0.8% fall in March. The decline was larger than consensus expectations for a 0.9% fall. Seven of the ten components that make up the index, saw declines on the month, dominated by weaker business condition expectations and equity prices.

Chinese banks lowered their 1yr and 5yr loan prime rates this morning, reducing both by 10bps. The move had been widely anticipated, following PBOC guidance earlier in the month. The cut marks the eighth reduction in rates this cutting cycle.

Today’s Economic Data and Events

• 18:00 EC consumer confidence index (May P): forecast -16.0

Fixed Income

• Monday saw US Treasury yields reverse some of the rise seen after the Moody’s downgrade in US debt. The 2yr UST fell 2bps to reach 3.9745% while the 10yr yield declined by 3bps to 4.4474%.
• Moves in major European bond yields were mixed on Monday. The 10yr Gilt yield rose 1.5bps to 4.6627%, while the 10yr Bund yield was broadly flat at 2.587%.

FX

• The Moody’s downgrade drove the US dollar lower on Monday, with the spot index dropping almost 0.7%. EURUSD rose 0.7% to 1.124, while GBPUSD gained 0.6% to 1.3361. USDJPY fell 0.58% to 144.86.
• Commodity currencies strengthened against the dollar on the day. USDCAD fell 0.13% to 1.3951, NZDUSD gained 0.85% to 0.5931, and AUDUSD gained 0.8% at 0.6457.

Equities

• US equity markets largely shrugged off the Moody’s downgrade, seeing modest gains on Monday. The Dow Jones rose 0.3%, the S&P 500 gained 0.1% and the NASDAQ increased by a muted 0.02%.
• European equity markets were mixed on the day. The Eurostoxx 50 was broadly flat, the FTSE 100 increased 0.17%, the CAC 40 fell by a marginal 0.04% and the DAX rose 0.7%.
• Local markets ended Monday higher, with the DFM up 0.7% and the ADX up 0.12%. The Saudi Tadawul fell 0.3%.

Commodities

• Oil prices saw modest gains on Monday, as investors waited for news of potential Russia-Ukraine peace talks. Brent futures gained 0.2% to USD 65.54/b while WTI increased by 0.32% to USD 62.69/b.