Dubai unveils AED 34bn Metro Gold Line

HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, approved the Dubai Metro Gold Line yesterday, the emirate's largest sustainable transport project with an investment of around AED 34bn. The new line will extend 42km across 18 stations and will be Dubai's first fully underground metro, with inauguration scheduled for 9 September 2032, a delivery timeframe 30% faster than the Blue Line. The Gold Line will connect to the Red Line at Business Bay and Jumeirah Golf Estates, to the Green Line at Al Ghubaiba, and to Etihad Rail at Meydan and Jumeirah Golf Estates, linking Dubai to the UAE national rail network. The route will serve more than 55 development projects and is projected to benefit over 1.5 million people by 2040, with daily ridership expected to reach 465,000 beyond that date. It will expand the total Dubai Metro network from 120km to 162km, a 35% increase, and raise station count from 67 to 85. The Roads and Transport Authority estimates a 430% cumulative economic return over 20 years of operation.

Inflation in the United Kingdom accelerated in March, with headline CPI rising to 3.3% y/y from 3.0% a month earlier, in line with consensus. The pickup was driven by an 8.7% monthly jump in motor fuel prices, the largest such monthly gain since 2022, reflecting the pass-through from the conflict. Services inflation unexpectedly accelerated to 4.5% from 4.3%, driven by a 10% monthly rise in airfares linked to the early Easter, while core CPI eased marginally to 3.1% from 3.2%. Food inflation picked up to 3.5% from 3.2%. The direct impact of higher fuel costs from the conflict will continue to feed through in coming months, with domestic gas and electricity prices also set to rise in July. Inflation had previously been tracking back to the 2% target in Q2 but is now expected to hold around 3% and accelerate in Q3. The Bank of England is expected to hold rates steady at the 30 April meeting. Markets are currently pricing in a 57% chance of a 25bps rate hike in June meeting.

The Turkish Central Bank left its benchmark one-week repo interest rate on hold at 37.0% yesterday, in line with expectations. The disinflationary trend in Turkey had already been slowing even prior to the US-Iran war, and CPI inflation remained elevated at 30.9% in March, from 31.5% the previous month. With the US-Iran war, and the pressures it is exerting on energy prices in particular, the risks are now for inflation to accelerate once more. As such, the pause on interest rate cuts begun at the previous meeting in March was always likely to be extended. In its statement the bank noted that leading indicators for April ‘suggest a slight increase in the underlying inflationary trend’, and maintained that the ‘tight monetary policy stance’ would be ‘maintained until price stability is achieved.’ The median analyst forecast for the one-week repo rate at year-end is now 32.0%, up from 29.0% in the previous survey.

Today's Economic Data and Events

12:00 Eurozone manufacturing PMI, April. Forecast: 50.9

12:30 UK manufacturing PMI, April. Forecast: 50.3

16:30 US initial jobless claims, week to 18 April. Forecast: 210k

17:45 US manufacturing PMI, April. Forecast: 52.5

Fixed Income

US Treasuries settled modestly lower yesterday with yields rising across the curve. The 2yr yield added 2bps to close at 3.7979% while the 10yr yield added 1bp to 4.3025%.

GCC credit markets were broadly flat at an index level overnight. A benchmark GCC sovereign USD index eased 0.02% while corporates edged up 0.03% and sukuk added 0.02%. CDS pricing was mixed across the region with generally small moves on the day. Egypt was the standout wider by 3bps to 328, while Turkey and Abu Dhabi each nudged around 1bp wider to 235 and 40 respectively. Saudi Arabia bucked the trend with a 1bp tightening to 67, while Dubai was unchanged at 74.7.

The Central Bank of the UAE announced its upcoming m-bill auction for 27 April 2026. The central bank plans to issue AED 1.5bn in 28-day m-bills; AED 1bn in 56-day m-bills; AED 1.5bn in 140-day m-bills and AED 2.1bn in 308-day m-bills. Upcoming redemptions are slated for 29 April (AED 1.7bn, yield of 3.71%) and 13 May (AED 800m, yield of 3.826%).

Currencies

The dollar index added 0.2% yesterday to close at 98.59, supported by higher Treasury yields. EURUSD eased 0.3% to 1.1705, while GBPUSD was broadly flat at 1.3502 after the UK CPI print. USDJPY was near unchanged at 159.48. In emerging makrtes, USDINR rose 0.3% to 93.7988 as the rupee weakened on higher oil prices and the equity selloff, while USDTRY was close to flat at 44.9218 and the Egyptian pound lost 0.4% to 52.0061.

Equities

US equities extended their rally to fresh record highs yesterday on the back of the ceasefire extension and a strong set of Q1 earnings. The S&P 500 added 1.05% to close at 7,137.90 and the NASDAQ rallied 1.64% to 24,657.57, both record closes, while the Dow Jones added 0.69% to 49,490.03. Semiconductors rose for a sixteenth consecutive session, and the S&P 500 is on track for its best month since 2020.

Locally, regional equity markets closed broadly lower. The DFM ended 1.0% lower while Abu Dhabi's ADX closed 0.8% lower. In Saudi Arabia, the Tadawul finished 0.9% lower on the day.

Commodities

Brent futures closed up 3.5% yesterday at USD 101.91/b and WTI lagged added 0.9% at USD 92.96/b. The weekly EIA petroleum status report for the week to 17 April showed commercial crude stockpiles rose by 1.9mn bbl, taking total commercial inventories above 465mn bbl, the highest level since June 2023. However, a 4.14mn bbl draw from the Strategic Petroleum Reserve more than offset the commercial build, leaving the overall nationwide crude stock change at a 2.2mn bbl draw. Refined product stockpiles drew across the board. Total US oil exports, including both crude and refined products, rose to a new record high of 12.9mn b/d, driven by the export of refined products. US jet fuel exports were back up to 370,000 b/d as global jet fuel shortages persist. US average gasoline prices remain above USD 4/gal, up from near USD 3/gal before the conflict.

Gold closed up 0.4% yesterday at USD 4,739.90/oz while silver gained 1.3% to USD 77.71/oz, both recovering some ground after the prior session's losses.