UAE signs latest CEPA deal with Vietnam

The UAE has signed its latest CEPA trade deal, this time with Vietnam, with the signing of the document witnessed by UAE Prime Minister Sheikh Mohammed bin Rashid al Maktoum and Vietnam’s Prime Minister Pham Minh Chinh during the Vietnamese premier’s state visit to the UAE. A number of company agreements were made on the sidelines, including for DP World to partner with Vietnam National Shipping Lines to develop Can Tho Port in Vietnam.

Japan’s unemployment rate ticked down to 2.4% in September, from 2.5% previously, beating expectations that it would remain unchanged. The tightening labour market is a positive for the Bank of Japan as it should push up wages, and thereby stimulate price growth. Nevertheless, the outlook for Japan is somewhat uncertain in the near term following an inconclusive snap election held over the weekend, with no clear majority for any party and the incumbent LDP’s worst electoral performance since 2009.

Headline CPI inflation in Bahrain fell to 0.4% y/y in September, down from 0.9% the previous month. This was the third slowdown in a row, taking the pace of price growth down to levels last seen in February. Food prices were down 0.7% y/y, offset by housing and utilities prices which were up 0.6%.

Today’s Economic Data and Events

18:00 US Conference Board consumer confidence, October. Forecast: 99.3

18:00 US JOLTS job openings, September. Forecast: 8.0mn

Fixed Income

• US treasuries sold off further to start the week, with yields on the 2yr adding 3bps to 4.1377%, while the 10yr added 4bps to 4.2821%.

FX

• The dollar made further gains at the start of the week, with the DXY closing up 0.1% against its basket of peers.
• JPY closed down 0.6% on the back of political uncertainty, ending the day at 153.29. The only other notable loser was AUD which ended the day 0.4% lower.
• Elsewhere, there were gains against the greenback, with GBP adding 0.1% to close at 1.2972, while EUR added 0.2% to 1.0812.

Equities

• Equity markets started the week on the front foot, with gains starting in Asia. The Nikkei closed up 1.8% as the yen lost further ground on the back of the inconclusive election result, while the Shanghai Composite ended the day 0.7% higher.
• In Europe, the DAX, the FTSE 100, and the CAC ended up 0.4%, 0.5%, and 0.8% respectively. There were similar gains in the US, with the S&P 500 and the NASDAQ both up 0.3%, while the Dow Jones closed 0.7% higher.
• Locally, the ADX added 1.1% and the DFM 1.3%, while the Tadawul ended down 0.1%.

Commodities

• Global oil prices sold off sharply when markets opened on Monday as Israel’s actions against Iran over the weekend were perceived as comparatively limited, taking off some of the risk premium that had buoyed prices over the previous week.
• Brent futures ended the day down 6.1% at USD 71.4/b, while WTI ended at USD 67.4/b, also down 6.1%.