Dubai welcomed 8.68m international visitors YTD in May

Dubai welcomed 8.68m foreign visitors between January and May of 2025, according to a report from the Dubai Department of Tourism. The year-to-date figure marks a 7% rise in visitors over the same period in 2024. On a monthly basis, there were 1.53m visitors, with Western Europe remaining the largest source markets, accounting for 22% of visitors. Average hotel occupancy rates over the year-to-date rose to 82.9%, up from 81% over the same period in 2024.

While delivering testimony before the House Committee on Financial Services, Jerome Powell, reiterated that the Fed was in no rush to reduce rates given still-solid activity and heightened economic uncertainty caused by tariffs, but added that “many paths are possible”. Markets appear to have taken that as evidence of a July rate cut remaining a possibility. This adds to recent dovish comments from a small number of other Fed officials, suggesting that they would consider supporting a rate cut as soon as the July meeting.

US consumer confidence, as measured by the US Conference Board, fell unexpectedly in June, declining to a value of 93.0 from 98.3 the month prior. There were falls in both the current conditions and expectations components of the survey, with respondents citing ongoing concerns about US tariffs. The share of consumers reporting that jobs were plentiful dropped to a four year low of 29.2%.

German business sentiment improved in June, with the IFO business climate survey increasing to 88.4 from 87.5 the month prior, likely driven by an improved outlook for public spending. The improvement is consistent with the provisional PMI print released earlier in the week, which also ticked higher. There was a marked increase in the business expectations component, which rose to 90.7 in June, its highest level in over two years.

Today’s Economic Data and Events

No key data releases

Fixed Income

US Treasuries rose once more on Tuesday, on the back of weaker consumer confidence data and comments from Fed Chair Powell. The yield on the 2yr treasury fell 4bps to reach 3.8251%, while the 10yr yield fell 5bps to 4.2945%.

Moves in European bond yields were mixed on the day. UK, Italian and Swiss 10yr yields fell, while the remainder rose. The German 10yr Bund, in particular, gained almost 4bps to 2.542%.

The UAE sold AED 550m in a sukuk with a maturity of May 2027 with a yield of 3.88%. The bid-cover ratio was at 5.36x. The UAE also sold AED 550m in an August 2028 sukuk with a yield of 3.83% and a bid-cover ratio of 5.9x.

Fitch affirmed their ‘AA’ rating on Abu Dhabi’s sovereign noting strong “fiscal and external metrics.” Fitch kept the rating outlook as stable.

Türkiye has mandated banks for a 5yr USD sukuk, pricing around 7.25%.

Dar Al-Arkan has mandated banks for a USD 5yr benchmark sukuk.

FX

Weaker consumer confidence, comments from Fed Chair Powell and the holding of the Israel-Iran truce sent the US dollar spot index lower on Tuesday, falling 0.6%. EURUSD rose 0.3% to 1.1609, GBPUSD gained just under 0.7% to 1.3615 and USDJPY fell 0.8% to reach 144.94.

In emerging markets, USDINR fell almost 0.9% to reach 85.98 while USDTRY was broadly flat on the day, falling just 0.03% to 39.6037.

Equities

There were strong gains across US equity markets on Tuesday, with investors eyeing the possibility of a July rate cut after Fed Chair Powell’s comments. The Dow Jones gained 1.9%, the S&P 500 rose 1.1% and the NASDAQ increased 1.4%.

European stocks were also higher on the day. The Euro Stoxx 50 index rose 1.4%, the DAX gained 1.6% and the CAC 40 increased by 1%. The FTSE 100 remained flat.

In regional markets both the DFM and ADX rose 3.4%, while the Tadawul gained 2.4%.

Commodities

Oil prices saw further declines on Tuesday, driven by a surprise announcement from President Trump indicating that China would be allowed to continue buying Iranian oil. Both Brent and WTI fell 6%, ending the day at USD 67.14/b and USD 64.37/b, respectively.