Inflation in Dubai cools in March

Headline CPI inflation in Dubai slowed to 2.8% y/y in March, down from 3.2% over the previous two months and the slowest pace of annual price growth since October last year. Prices were 0.1% lower compared with February, marking the first monthly deflation since July 2024. Inflation over the first quarter averaged 3.0% y/y, slightly more than our 2025 forecast of 2.8% but we expect that price growth will be more modest through the remainder of the year than we have seen in Q1.

Abu Dhabi is targeting a contribution of AED 62bn from the tourism sector in 2025, up 13% from 2024 according to the chair of the emirate’s Department of Culture and Tourism. Hotel occupancy had reportedly reached 79% in Q1.

Property transactions by value in Oman fell by 2.5% y/y in the first three months of 2025 at OMR 572.7m. The total number of sales fell by slightly more than 6% in the same period to 15,815 while there was a 10% increase in the number of mortgages. Elsewhere hotel revenues rose by almost 11% y/y in Q1 2025 to OMR 79.4m with a strong rise in GCC, African and Oceania visitors.

US President Donald Trump renewed his attacks on Fed chair Jerome Powell, saying he has “always been to late” [sic]. The president called again for “pre-emptive cuts” to rates. Kevin Hasset, the director of the National Economic Council said that the president would “continue to study” the possibility of removing Chair Powell from his post, even as a direct legal path to dismissing a sitting Fed chair is unclear.

Today’s Economic Data and Events

• 18:00 EC Consumer confidence Apr: forecast -15.1
• 18:00 US Richmond Fed manufacturing index Apr: forecast -7

Fixed Income

• US Treasuries traded in wide ranges overnight as markets responded to President Trump’s direct criticism of Fed chair Powell. Yields on the 2yr UST ended the day lower by about 4bps at 3.7623% after nearly touching 3.8%. The 10yr yield jumped almost 9bps to 4.4106%, steepening the curve by about 12bps. Fed funds futures continue to price in about 91bps of cuts by the end of the year.
• Regional credit was weaker overnight with declines across all GCC geographies and category of bonds.
• New issuances may begin to pick up in coming weeks with press reports indicating PIF is looking to raise up to USD 2bn in a sukuk issue while Abu Dhabi Ports is also looking to borrow USD 2bn and Masdar may also approach the market.

FX

• The US dollar extended its sell-off overnight with a near 1% drop in the value of the DXY index. EURUSD added 1.1% to close at 1.1515 while GBPUSD rose by 0.6% to 1.3379. USDJPY also pulled lower in favour of the yen at 140.86, down 0.9%.
• Commodity currencies were pushed higher with the Kiwi leading the way. NZDUSD added 1.1% to settle at 0.6001 while AUDUSD rose by 0.6% to 0.6415 and USDCAD was flat.

Equities

• US equity markets sold off sharply as investors grow anxious over President Trump’s interference with the management of the Federal Reserve. The Dow Jones index fell 2.5% while the S&P 500 gave up 2.4% and the NASDAQ was lower by 2.6%. European markets were closed for public holidays.
• Local markets were mixed overnight with the DFM index higher by 0.2% while the ADX fell 0.1%. In Saudi Arabia the Tadawul was lower by 0.7%.

Commodities

• Oil markets dropped at the start of the week amid broader market anxiety. Brent futures fell 2.5% to USD 66.26/b while WTI was lower by the same amount at USD 63.08/b.
• Gold prices hit a new record level of USD 3,424/troy oz, up 2.9%, as markets seek haven assets. Silver was also brought higher while the rest of the metals complex was broadly lower.