UAE signs CEPA with Mauritius

The UAE has signed a comprehensive economic partnership agreement (CEPA) with Mauritius with a view to boosting bilateral trade, mainly in the services sector. It is the first CEPA the UAE has signed with an African country, according to officials. Non-oil trade between the UAE and Mauritius stood at USD 170mn in 2023 and the aim is to more than double this to USD 500mn in five years. Both countries’ growth is expected to benefit from the increased trade. The UAE has already invested a cumulative USD 13.2bn in Mauritius.

Kamala Harris has sufficient pledges from Democratic delegates to secure the party’s nomination as candidate for the presidential election in November. The official voting will take place at the Democratic National Convention on 19-22 August. Harris boosted her campaign coffers by USD 81mn in the first day after announcing her candidacy and also has access to campaign funds that had been raised for Joe Biden.

No key Economic Data today

15:00 Central Bank of Turkey rate decision, no change expected.

18:00 US existing home sales (Jun) forecast 3.99m (-2.9% m/m)

Fixed Income

• The treasury yield curve steepened yesterday as the long-end moved higher later in the day without a clear catalyst. The 10y yield rose +1bp to 4.25% on Monday while the 30y rose +2bp to 4.47%. The 2y was up just 0.6bp to 4.52%.
• European bond yields were mixed again on Monday, with the 10y gilt yield up 3.7bp to 4.16% while German bunds were up 2.7bp to 2.49%. Swedish, Swiss and Italian benchmark yields declined slightly.

FX

• The dollar index declined -0.1% on Monday as gains in the majors were more than offset by weakness in the commodity currencies. JPY gained 0.4% to 156.84 while CHF and GBP gained -0.2% to 0.8875 and 1.2938 respectively. The commodity currencies all weakened against the dollar with AUD down -0.3% to 0.6662. Commodity currencies are softer in Asian trade this morning as well.

Equities

• US equities rallied on Monday with Nasdaq100 gaining 1.5% and the S&P500 up 1.1%. Crowdstrike remained under pressure following Friday’s global software outage. The market is now looking ahead to earnings reports, particularly from the “magnificent seven”.
• European indices also recovered yesterday with the EuroStoxx50 up 1.5% and the FTSE100 up 0.5%.

Commodities

• Oil prices declined again on Monday with Brent down -0.3% to USD 82/b and WTI down -0.4% to USD 79.78/b. Concern over weak Chinese demand has weighed on oil prices over the last several sessions, and also on industrial metals prices.