28 May 2025
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UAE and Philippines set to sign CEPA

Daily Outlook - 28 May 2025

By Daniel Richards

The UAE and the Philippines are expected to sign a Comprehensive Economic Partnership Agreement (CEPA) next month, which would boost trade and unlock bilateral investment between the two countries. This would be the Philippines’ first free trade agreement with a Middle Eastern country. The announcement was made during a business forum at the Dubai Chamber of Commerce.

Durable goods orders in the US fell sharply in April, dropping 6.3% m/m, though not as much as the predicted 7.8% drop. This followed a downwardly revised 7.6% boost in March as business looked to front-load orders in order to get ahead of incoming tariffs. Stripping out transportation, orders were up 0.2% following a 0.2% fall in March. In other US data, the Conference Board consumer confidence index surprised to the upside at 98.0 in May, up from 85.7 previously and beating the predicted 87.1, boosted by more positive news around paused tariffs.

The Reserve Bank of New Zealand cut its official cash rate by 25ps, taking the benchmark interest rate to 3.25%. This was the sixth cut in a row from the RBNZ as the central bank looks to support growth, and it signalled that it had room for further easing.

CPI inflation in France came in lower than expected in May, up 0.6% y/y compared with the predicted 0.9%. Prices were 0.2% lower than the previous month.

Today’s Economic Data and Events

14:30 India industrial production, % y/y. Forecast: 1.3%

Saudi Arabia M3 money supply, % y/y, April

Saudi Arabia SAMA net foreign assets, SAR, April

Fixed Income

  • There was a relief rally for USTs yesterday, with yields falling across the curve but especially on the longer end. Yields on the 2yr dropped 1bps to 3.9808%, while the 10yr was down 7bps to 4.4436% and the 30yr fell 9bps to 4.9511%, its biggest drop this year.
  • Saudi Aramco issued three tranches worth USD 5bn on Tuesday, with a USD 1.5bn 5yr bond at 80 over USTs, a USD 10yr priced at +95, and a USD 2.25bn 30-year bond at +155. While the firm’s debt level has risen to its highest in nearly three years in Q1, it remains low when compared to other oil majors.

FX

  • The dollar index closed up 0.6% on Tuesday. The biggest loser was JPY which fell 1.0% to 144.33. GBP ended the day 0.4% lower at 1.3507, while EUR dropped 0.5% to 1.1328.

Equities

  • There were strong gains in US equities as they reopened from Monday’s holiday, following more positive noises from President Trump around EU tariffs over the weekend. The Dow Jones, S&P 500, and NASDAQ added 1.8%, 2.1%, and 2.5% respectively.
  • Locally, the DFM added 0.4% while the ADX closed 0.2% higher on the day.

Commodities

  • Oil prices fell on Tuesday, with Brent futures closing down 1.0% at USD 64.1/b and WTI also dropping 1.0% as it reopened from Monday’s holiday, closing at USD 60.9/b. Both benchmarks are up around 0.7% in early trading this morning in a risk-on environment, however.

Written By

Daniel Richards Senior Economist


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