Dubai International hits new record

Dubai International handled a record 24.2mn passengers in the third quarter, y/y growth of 1.9%. This puts January to September traffic at 70.1mn, up 2.1% over the corresponding period in 2024. India was the biggest source market for passengers at 8.8mn, followed by Saudi Arabia (5.5mn), the UK (4.6mn), Pakistan (3.2mn) and the US (2.4mn). London was the key city link at 2.8mn passengers, followed by Riyadh on 2.3mn and Mumbai on 1.8mn. The news comes in the same week as the Dubai Airshow where a succession of sizeable new aircraft orders by the UAE’s national carriers has underscored the growing importance of the aviation sector to the economy.

South Korean President Lee Jae-myung has been on a state visit to the UAE this week, where he was welcomed by UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan on Tuesday, and attended a business roundtable event with business leaders from both countries yesterday. A number of agreements between the two countries have been secured which include cooperation in the development of new fields such as AI, space, and bio-health, alongside strengthening existing areas of cooperation including shipping, and nuclear energy.

The meeting minutes from the October Fed meeting show a divided FOMC, with ‘many’ participants of the mind that while further easing would be appropriate, it would be better for rates to remain unchanged through the remainder of 2025. The minutes also showed that ‘several’ policymakers had also thought holding pat last month would have been the sensible course of action – in the event there was only one dissent to hold at the meeting which resulted in a 25bps cut, with one for a larger 50bps cut. While ‘many’ is not quite as forceful as ‘most’ and still signifies a minority, it is still greater than the ‘several’ that would favour a December cut if economy evolved as they had expected.

UK CPI inflation slowed to 3.6% y/y in October, down from 3.8% the previous month. While this was slightly higher than the predicted 3.5% it is still the first slowdown in annual price growth since May and leaves a December rate cut from the Bank of England still on the table after the decision to hold at the previous meeting – though the upcoming government budget due next week adds another layer of uncertainty. Prices were up 0.4% m/m, in line with expectations and compared to flat growth in September. Annual core inflation slowed to 3.4% y/y, down from 3.5% previously. UK inflation is generally expected to slow through next year as regulated energy price rises this year pass through the base.

Today’s Economic Data and Events

17:30 US nonfarm payrolls, September. Forecast: 54,000

17:30 US initial jobless claims, week to November 15. Forecast: 226,000

Egypt overnight deposit rate. Forecast: 20.00%

Fixed Income

The hawkish-leaning minutes from October’s FOMC meeting released yesterday prompted a rise in UST yields. Both the 2yr and the 10yr closed up 2bps, at 3.5915% and 4.1367% respectively. Market pricing on a December cut has slipped to just 27%, from an almost certainly several weeks ago.

FX

• The dollar index closed up 0.7% yesterday against its basket of peer currencies, rising to its highest level since May as the hawkish FOMC minutes dampened expectations of a December cut.
• Gains were broad based, with significant losses from JPY which ended the day 1.1% weaker as concerns around an expansionary fiscal policy from Sanae Takaichi mounted. JPY closed at 157.16.
• EUR closed down 0.4% at 1.1538 while GBP ended the day down 0.7% at 1.3059 as the weaker inflation print rose expectations for one more rate cut this year.

Equities

• The closely watched Nvidia results released yesterday exceeded expectations and relieved some tension in global equity markets and especially around the AI boom.
• In the US, the tech-heavy NASDAQ closed 0.6%, while the Dow Jones and the S&P 500 added 0.1% and 0.4% respectively.
• Locally, the ADX closed down 0.2% while the DFM slipped 0.6%. Saudi Arabia’s Tadawul closed 0.9% lower.

Commodities

• Oil prices slipped yesterday, with both benchmarks closing down by 2.1%. Brent futures ended the day at USD 63.5/b, while WTI was at USD 59.4/b.
• The immediate catalyst was the first increase in US stocks of gasoline and distillates in a month last week, although crude inventories did decline by 3.4mn bbl.