Egypt and Singapore explore free trade deal

Egypt and Singapore are discussing a free trade agreement between the two countries and efforts to increase economic cooperation. Both countries signed memorandums of understanding covering healthcare, food security and SME initiatives during a bilateral meeting between the Egyptian and Singaporean presidents. Bilateral trade between Egypt and Singapore was estimated at USD 487m for 2024.

Neel Kaskhari, president of the Minneapolis regional Federal Reserve Bank, said he would support an additional two cuts from the Fed for the rest of this year as the “risk of a sharp increase in unemployment” meant the Fed would need to take action. He also described the cut taken at the September FOMC as “insurance.”

US President Donald Trump and Chinese President Xi Jinping held a call at the end of last week to discuss trade, fentanyl and geopolitics according to press reports. The two are set to hold a bilateral meeting in October at the next APEC summit in South Korea.

Today’s Economic Data and Events

12:00 TU foreign tourist arrivals Aug

18:00 EC consumer confidence Sept: forecast -15

Fixed Income

US Treasuries pulled lower at the end of the week with the 2yr and 10yr yields rising. The 2yr UST yield added less thana 1bp at 3.5715% while the 10yr yield rose by 2bps to 4.1274%. Markets are pricing in a 92% likelihood of a cut at the October FOMC meeting and just short of 90% for the December FOMC.

Local credit markets closed weaker in the final session on Friday with losses across segments and most geographies.

Union Insurance had its rating upgraded to ‘BBB+’ by Fitch with a stable outlook.

FX

The US dollar drifted higher at the end of the week, gaining against most peer currencies. EURUSD dropped 0.4% to 1.1746 while GBPUSD fell almost 0.7% to 1.3472. Japanese yen recorded a more muted move on the back of the perceived hawkishness of the Bank of Japan’s hold at the end of last week.

The Egyptian pound closed steady at 48.173 while the Turkish lira was moderately weaker with a 0.2% loss against the dollar at 41.384. Indian rupee strengthened at the end of the week, closing at 88.1.

Equities

US markets remained well bid at the end of the trading with gains of 0.4% in the Dow Jones and 0.5% in the S&P 500. The NASDAQ managed stronger gains of 0.7%. European markets were more muted, however.

In local markets, the DFM index added 0.7% at the end of last week while the ADX 15 was up by 0.4%. The Tadawul started the week with a gain of 0.3%.

Commodities

The prospect of more bilateral talks between China and the US helped to temper fears that the US would impose further secondary sanctions on China for importing Russian oil. Brent futures closed later in the session, falling 1.1% last week to USD 66.68/b while WTI fell by 1.4% to USD 62.68/b.