Saudi Arabia announces Asian Winter Olympic Games postponement

Saudi Arabia and the Olympic Council of Asia have announced that the 2029 Asian Winter Games, which had been scheduled to take place in Saudi Arabia’s Trojena, have been postponed, with a ‘later date to be announced in due course’ according to the official statement from the two partners. There was no reason given for the postponement, though there has been speculation in recent months that the under-development resort, which needs complex technical planning to construct and ensure enough snow for the event, would not be ready in time. Instead, the statement says that Saudi Arabia will hold a series of standalone winter events in the meantime. While there is a recalibration of projects clearly underway in Saudi Arabia, the country’s pipeline of project spending – roughly USD 1.6tn – is so large that even a sharp revision to this would still see sufficient expenditure to keep growth at a rapid clip. Q4 2025 GDP results are due on Sunday, and we expect that both non-oil and non-growth was robust. Yesterday, Saudi Arabia released oil exports data for November, with receipts up 5.4% y/y to SAR 67.04bn (USD 17.9) though this was down from SAR 70.11bn in October.

UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan received Russian special presidential envoy for foreign investment and economic cooperation Kirill Dmitriev over the weekend. Discussions included UAE-Russia cooperation and efforts to boost bilateral ties across different fields with a focus on investment and development.

US President Donald Trump has threatened Canada with 100% tariffs if the country goes ahead with a trade deal with China, warning that he did not want Canada to become a 'drop-off port' for Chinese goods, and that China would 'eat Canada alive.' Canadian officials have maintained that they are not pursuing a free deal with China but that diversifying trade partners is essential in the current global environment, even while they hope to keep existing strong relations with the US.

India’s economy has started the year on the front foot with an uptick in the composite PMI reading to 59.5, up from 57.8 in December, although the PMI remains lower than the three-year average of 60.0. The January pick-up was driven by both services and manufacturing: services PMI accelerated to 59.3, from 58.0 previously, while manufacturing rose to 56.8, from 55.0 in December. Domestic orders are driving growth as tariffs continue to weigh on exports, and GDP growth remains strong – the consensus prediction is for growth of 7.5% in the financial year ending in March, slowing modestly to 6.5% next year.

UK data released on Friday came in strong, with both retail sales for December and January’s PMI survey coming in stronger than predicted. Retail sales rosae 0.4% in the final month of 2025, boosted by Christmas shopping with online sales doing especially well (up 4.2%) as poor weather dampened in-store sales growth. Stripping out auto fuel, growth was 0.3% m/m, beating the predicted no change and following two straight contractions in October and November. Meanwhile, the composite PMI survey jumped to 53.9 in January, up from 51.4 previously and far stronger than the predicted 51.5. This marked a 21-month high for the index, with technology and financial services firms driving the improvement. Both services and manufacturing strengthened, coming in at 54.3 and 51.6 respectively, from 51.4 and 50.6 in December.

The Eurozone PMI survey was unchanged in January, with the composite measure staying static at 51.5, missing the predicted 51.9. Manufacturing contracted at a marginally slower rate, coming in at 49.4, compared with 48.8 in November, while services growth slowed to 51.9, from 52.4 previously. Looking at the bloc’s two largest economies, Germany’s PMI rose to 52.5, up from 51.3 previously, while in France the composite measure turned contractionary at 48.6, down from a neutral 50.0 in December. This was driven by a reversal in the services PMI to 47.9, from 50.1 previously, with political turmoil around the government budget weighing on the index.

In the US, the composite PMI survey ticked up modestly to 52.8 in January, from 52.7 previously. Services PMI was unchanged at 52.5, missing the predicted 52.9, while manufacturing saw a modest improvement to 51.9, from 51.8 in December.

Today’s Economic Data and Events

13:00 Germany IFO business climate, January. Forecast: 88.2

17:30 US durable goods orders, % m/m, November. Forecast: 3.0%

Fixed Income

• There were small gains for USTs on Friday with no major catalyst, but they lost ground over the week as a whole, albeit modestly. Yields on the 2yr closed up by less than 1bps w/w to end Friday at 3.5940, while the 10yr was up marginally to 4.2252%.
• Major central banks meeting this week include the US Fed on Wednesday, and the central banks of Brazil, Canada, South Africa, and Sweden.

FX

• Geopolitical tensions caused the dollar to lose ground against a range of developed market currencies last week. The dollar index closed down 1.8% against its basket of peers: GBP added 2.0% to 1.3643, while EUR closed at 1.1828, also up 2.0%. JPY strengthened by 1.5% w/w to 155.70, though it remains subject to volatile swings around domestic political news.

Equities

• Local equity indices closed higher on the week despite losing ground on Friday. The DFM closed up 3.7% w/w despite Friday’s fall of 0.2%, while the ADX added 2.5% w/w, despite also dropping 0.2% on Friday.
• In the US, stock markets trended lower amid headline noise. The NASDAQ closed down 0.1% w/w, the S&P 500 down 0.4%, and the Dow Jones down 0.7%.

Commodities

• Oil prices received another headline driven boost on Friday after President Trump warned that there were US naval movements towards Iran. After pulling back on Thursday as tensions had quietened and the US reported a build in stocks, prices surged again with Brent futures closing up 2.8% to USD 65.9/b and WTI adding 2.9% to USD 61.1/b. Gains over the week were 2.7% for both benchmarks.