New home sales in the US surge

New home sales in the US rose sharply in August, up by more than 20% to 800k. That was the strongest level since the start of 2022 and represents a material deviation from levels recorded over the rest of 2025. The stock of new housing units has risen substantially in the US this year and the August sales print has taken a large share out of the available inventory. As rates move lower in the US and mortgage costs follow, that could create further housing demand.

The US cut tariffs on imports of EU manufactured cars to 15% with a retroactive start date of August 1. Earlier in July the US and the EU signed a trade deal that would see most goods exported to the US face a tariff of 15%.

Today’s Economic Data and Events

10:00 KSA trade balance July

16:30 US GDP Q2 (t): forecast 3.3%

16:30 US durable goods Aug: forecast -0.3%

16:30 US initial jobless claims Sept 20: forecast 233k

18:00 US existing home sales Aug: forecast 3.95m

Fixed Income

A heavy pace of corporate bond issuances pulled flows away from US Treasuries overnight. Yields on the 2yr UST rose by about 2bps to 3.6041% while the 10yr yield added 4bps to 4.1466%.

Mary Daly of the San Francisco Fed said overnight that “further policy adjustments will be needed” but that the Fed’s outlook was “projections, not promises.”

Abu Dhabi is preparing a benchmark USD issuance in 3yr and 10yr tranches to price around +40 and +55.

FX

There was a sharp gain in the US dollar against peer currencies overnight as US economic data remains relatively positive. EURUSD fell by almost 0.7% to 1.1738 while USDJPY spiked by nearly 0.9% to 148.90. GBPUSD was another notable loss with a decline of 0.6% to 1.3447.

In emerging markets, Indian rupee managed to hold its ground at around 86.695 while the Turkish lira was steady at 41.403. Egyptian pound was modestly stronger at 48.16.

Equities

In equity markets Saudi Arabia was the standout performer with a more than 5% gain in the Tadawul index on news that Saudi Arabia was considering raising the limit on foreign ownership of listed stocks. The move could potentially bring billions of dollars of flows to the Kingdom’s stock markets as indexes based on emerging economies increase their weighting of Saudi equities and passive flows follow. Financials were among the strongest gainers on the Tadawul overnight but there was positivity across all sectors.

In the UAE stocks fared worse, however, with a decline of 1.5% in the DFM and a 1.9% drop in the ADX index.

Benchmark indexes also had a weak session with stocks lower in the US.

Commodities

Oil prices had a strong session with a 2.5% rise overnight in both Brent and WTI to US 69.31/b and USD 64.99/b respectively. There was a modest draw in commercial crude stocks last week according to weekly EIA data while oil output ticked up to 13.5m b/d.

Copper prices were the other standout overnight as Freeport-McMoran announced an interruption to supplies from a mine in Indonesia. LME 3mth copper rose by 3.6% to USD 10,366/tonne.