Dubai to IPO stake in parking business

The Dubai Investment Fund will sell 25% of its public parking business in an IPO. The subscription period is expected to close on 12 March for 749.7mn of Parkin Company PJSC, with shares likely to start trading on 21 March. This is the sixth IPO from the Government of Dubai since the start of 2022.

US consumer confidence unexpectedly declined in February, according to the Conference Board. The consumer confidence index fell to 106.7 from (a downwardly revised) 110.9 in January with both the current situation and the expectations components weakening. While consumers are more sanguine about inflation, there was increased concern about the economy, the labour market and the political environment, according to the Conference Board.

US durable goods orders declined by a larger than expected -6.1% m/m in January as commercial aircraft orders fell sharply. Excluding transport equipment, durable goods orders declined -0.3% last month. Firms appear to be cautious on increasing investment in business equipment as borrowing costs remain high.

Today’s Economic Data and Events

14:00 Eurozone consumer confidence

17:30 US GDP (Q4, second reading) forecast 3.3% q/q annualized

17:30 US Core PCE (Q4, second reading) forecast 2.0% q/q annualised

Fixed Income

The US 10y benchmark yield closed higher again yesterday at 4.30% but is a touch lower in Asian trade this morning ahead of US GDP and PCE data. The 2y yield declined to 4.7% yesterday while 30y treasury yield rose 4bp to 4.43%. 10 yields all rose across the Eurozone and UK yesterday with German benchmark bunds up 2.5bp to 2.46% while the 10y gilt yield was up 3.4bp to 4.2%.

RBNZ kept its cash rate unchanged at 5.5% as expected this morning and noted that the risks to the inflation outlook have become “more balanced”. The bank’s new forecasts show a smaller probability of a rate hike this year but no cuts until 2025.

Abu Dhabi is considering a Eurobond issue to boost liquidity of its existing debt, according to a Bloomberg report. If the deal goes ahead, it would be the first debt issuance by the emirate since 2021. We expect the UAE to run a consolidated budget surplus of just under 4% of GDP this year.

The Government of Sharjah has mandated banks for a USD denominated 12-year benchmark sustainable sukuk. Sharjah’s existing 10y bond is trading at a yield of 5.6%.

FX

The USD index was unchanged yesterday with JPY seeing the biggest gain against the dollar at 0.2% to 150.27. EUR and GBP were also fractionally stronger on Monday at 1.09 USD and 1.27 USD respectively.

Among the commodity countries, AUD and CAD gained while NZD weakened for the third consecutive day on Tuesday. Kiwi is trading -0.8% lower this morning at 0.6113 after a more dovish stance from the RBNZ at its policy meeting. AUD also lost ground this morning after January CPI came in slightly lower than forecast at 3.4% y/y, unchanged from December.

Equities

US equities had a mixed session on Tuesday with the DJIA closing -0.3% lower while the S&P500 and Nasdaq100 both gained 0.2%. The Dax continued to outperform other European indices yesterday, rising 0.8%. Asian equity markets are trading softer this morning with the Hang Seng down -0.6% as of this writing.

The DFMGI closed 1.2% higher yesterday with Commercial Bank of Dubai up almost 14% in the session. ADXGI gained 0.3% while the Tadawul ASI rose 0.6% on Tuesday.

Commodities

Brent and WTI both closed higher again on Tuesday at USD 83.7/b (1.4%) and USD 78.9/b (1.7%) respectively. However oil prices fell in Asian trade this morning after API reported an increase in crude stocks of more than 8mn barrels. Official US inventory data will be released this evening.