UAE Cabinet approves record AED 92.4bn Federal Budget for 2026

The UAE Cabinet has approved a record Union General Budget for 2026, with revenues and expenditures budgeted at AED 92.4bn, representing a substantial 29.3% increase from the 2025 budget of AED 71.5bn. The federal budget plan continues to aim for a balanced approach, though it accounts for a relatively modest share of total government spending given that individual emirates maintain their own budgets. Nevertheless, it serves as a useful indicator of federal spending priorities and economic policy direction. The sharp increase in the 2026 budget reflects the government’s commitment to balanced development across economic and social sectors. Notably, the Cabinet also approved establishing a program to grant the Federal Financial Centre annual allocations, aimed at ensuring financial sustainability of federal institutions.

Sheikh Mohammed bin Rashid highlighted the UAE’s strong economic momentum, with cumulative outward FDI reaching AED 1.05tn in 2024 up 9% y/y, placing the country first regionally and among the top 20 globally. Exports more than doubled to AED 950bn between 2019-2024, supported by 35 international economic agreements.

The United States and Japan signed an agreement to secure critical mineral and rare earth supplies, addressing China’s control of over 90% of global rare earth processing. The partnership includes streamlined permitting, joint stockpiling arrangements, and supply chain cooperation with international partners. Japan has previously committed USD550 bn in US investments.

Today’s Economic Data and Events

• 18:00 Richmond Fed Manufacturing Index Oct Forecast -12

Fixed Income

US Treasuries were mixed on Monday. The 2yr yield rose 1bps to 3.4905% while the 10yr declined 2bps to 3.9795%.

FX

The dollar spot index closed down 0.17% on Monday. EURUSD rose 0.15% to 1.1645. GBPUSD climbed up 0.19% to 1.3336 while USDJPY closed flat at 152.88.

In emerging markets, USDTRY declined 0.18% to 41.8699. USDINR closed down 0.45% at 88.247. USDEGP declined 0.29% to 47.4505.

Equities

US equities market continued to reach record highs on Monday. The S&P 500 climbed 1.2% to 6,875.16, while the Dow Jones Industrial Average rose 0.7% to 47,544.59. The Nasdaq Composite surged 1.9% to 23,637.46.

In Europe, The Eurostoxx 50 rose 0.6%, the DAX rose 0.3%, the CAC 40 closed up 0.2% and the FTSE 100 gained 0.1%.

In local markets, the DFM closed down 0.4% while the ADX declined 0.1%. Saudia’s Tadawul closed up 0.2%.

Commodities

Oil prices declined on Monday on the back of oversupply concerns and that Russian sanctions may prove less impactful than anticipated. Brent futures fell 0.49% to reach USD 65.62/b and WTI dropped 0.31% to USD 61.31/b.

Precious metals saw big declines on Monday on the back of rising optimism on a US-China trade deal. Gold prices fell 3.2% to close at USD 3,982.21/troy oz, while silver declined 3.7% to USD 46.85/troy oz.