UAE targets 50% Agentic AI transformation within two years

The UAE Cabinet, chaired by HH Sheikh Mohammed bin Rashid Al Maktoum, approved a new government framework targeting the transformation of 50% of federal government sectors, services and operations to Agentic AI models within two years, positioning the UAE as the first government globally to deploy Agentic AI at scale across its operations. The initiative enables autonomous, AI-driven execution and decision-making, with intelligent systems able to monitor changes, analyse data, offer recommendations, manage operations and run independent actions in real time, reducing operational costs and accelerating service delivery. HH Sheikh Mansour bin Zayed Al Nahyan will oversee implementation, with a dedicated taskforce chaired by Mohammad Al Gergawi, Minister of Cabinet Affairs, driving a phased rollout across ministries based on continuous performance assessment.

In Ajman, the Department of Tourism, Culture and Media announced a package of incentives to support tourism establishments and strengthen the sector’s competitiveness. Measures include a six-month deferral of tourism fee payments effective 1 March 2026, exemptions from late payment penalties on licence renewal, and exemptions on event permit and exhibition participation fees. The package also introduces a flexible interest-free instalment scheme for dues, while museum visitors will be exempted from entry fees through the end of 2026.

Japan's core CPI, which strips out fresh food, rose 1.8% y/y in March, in line with the median market forecast and up from 1.6% y/y in February, but staying below the Bank of Japan's 2% target for a second consecutive month as government fuel subsidies and moderating food inflation offset the energy shock from the Iran war. The core-core measure, which excludes both fresh food and fuel and is watched by the BOJ as a better gauge of demand-driven price pressures, slowed to 2.4% y/y from 2.5% y/y the previous month. Headline CPI accelerated to 1.5% y/y. A separate BOJ services producer price index accelerated to 3.1% y/y in March from 2.7%, driven by a 42.1% y/y jump in ocean freight costs, a clear signal of the pressures caused by the effective closure of the Strait of Hormuz. The BOJ is widely expected to hold rates at next Tuesday's meeting but signal readiness to hike, with overnight swap markets pricing roughly a 67% of a 25bps hike by June.

The flash April PMIs delivered a split global picture. The US composite rose to 52.0 from 50.3, with manufacturing jumping to 54.0 on emergency stockpiling ahead of expected supply disruptions. Input and output prices accelerated sharply, and supplier delivery times lengthened at the fastest pace since August 2022. The UK composite also printed 52.0, up from 50.3, with input costs rising at the sharpest rate in the 28-year history of the series. In contrast, the Eurozone composite slipped to 48.6 from 50.3, its first sub-50 reading in more than a year, as services fell to 47.4. Japan’s composite eased to 52.4, although manufacturing jumped to 54.9, the strongest output reading in more than 12 years.

US initial jobless claims rose 6k to 214k in the week ending 18 April, modestly above the 210k consensus forecast but still at levels consistent with low layoffs. Continuing claims rose to 1.82mn in the previous week. The filing period coincides with the reference week for the April US employment report and is broadly in line with other recent data suggesting the US labour market is stabilising.

Today’s Economic Data and Events

10:00 UK retail sales ex-fuel, % m/m, March. Forecast: -0.4%

18:00 US University of Michigan sentiment, April final. Forecast: 47.6

Fixed Income

US Treasuries sold off modestly yesterday as higher oil prices and hot flash PMIs reinforced the hawkish repricing of the Fed path. The 2yr yield closed up 3.6bps at 3.8337%, while the 10yr added 2.2bps to 4.3244%.

Regional credit was softer, with a broad GCC USD index down 0.10% on the day. Sovereigns led the move lower at 0.14%, while corporates and sukuk were marginally weaker at 0.03% and 0.05% respectively. By geography, UAE bonds fell 0.16%, Saudi 0.05%, Turkey 0.25% and Egypt 0.80%. CDS widened across the region, with Dubai 2.9bps wider at 77.6bps, Abu Dhabi 2.1bps wider at 41.7bps, Saudi Arabia 1.2bps wider at 68.4bps, Turkey 2.9bps wider at 238bps and Egypt 4.3bps wider at 332bps.

FX

The dollar index edged 0.2% higher to close at 98.77. EUR/USD fell 0.2% to 1.1683 after the Eurozone PMI shock, while GBP/USD lost 0.3% to 1.3467. USD/JPY firmed 0.1% to 159.7.

In emerging markets, The Indian edged lower for a fourth consecutive session, with USD/INR closing 0.3% higher at 94.11 as energy-importer vulnerability returned to the fore. The Egyptian pound slipped 1.2% against the dollar to 52.62 as it gave back recent gains on the renewed oil spike. The Turkish lira was broadly unchanged at 44.97.

Equities

US equity indices reversed fresh intraday records as the Hormuz headlines soured sentiment late in the session. The Dow Jones closed down 0.4%, the S&P 500 fell 0.4% and the NASDAQ dropped 0.9%.

Regionally, the ADX closed 0.4% lower at 9,747 while the DFM ended broadly flat at 5,814, Saudi Arabia’s Tadawul closed its trading week down 1.2% at 11,110.

Commodities

Oil prices jumped on a combination of stalled diplomacy and tanker seizures inside the Strait of Hormuz. Brent futures closed up 3.1% at USD 105.07/b, briefly trading above USD 107/b. WTI added 3.1% to USD 95.85/b, up as much as 5.8% at its intraday peak. The two-day move since Tuesday’s close now stands at roughly USD 6.6/b on Brent and USD 5.8/b on WTI. B

Gold prices fell 1.0% to close at USD 4,694.14/oz as the move higher in real yields and the firmer dollar outweighed any safe-haven bid, leaving bullion around 11% below its pre-war peak of USD 5,278/oz. Silver declined 2.9% to USD 75.44/oz.