Abu Dhabi announces measures to support private sector

Abu Dhabi has announced several programmes to support economic growth in the emirate, including a new strategic road map from the Abu Dhabi Chamber of Commerce, the establishment of the Abu Dhabi Family Business Council, a new business licensing entity and a new start-up focused investment zone. The focus of these latest initiatives appears aimed at increasing the role of start-ups and entrepreneurs in the emirate’s economy, allowing the private sector to contribute further to the growth trajectory in Abu Dhabi.

Private sector payrolls in the US increased by 146k in November according to the latest estimate from ADP. That represents a moderation from the 184k added a month earlier and was the slowest print in in the last three months. Services industries accounted the bulk of the job gains in the private sector while wages for those getting new roles improved to year/year growth of 7.2%, up from 6.7% a month earlier. The official nonfarm payrolls data will be released later this week where 215k jobs are estimated to have been added in November.

Fed chair Jerome Powell said he felt the US economy was in “remarkably good shape” and that the Fed could be a “little more cautious” as it cuts rates toward a neutral level. Powell also noted that the Fed intends to keep policy restricted but “less so over time.” He didn’t explicitly mention his view on whether the FOMC should or should not cut again in December as several other Fed speakers have given fairly muted endorsement for another cut this year.

The ISM services index for the US economy dropped to 52.1 in November thanks to a decline in new orders. Respondents to the survey reportedly highlighted policy uncertainty following the election were a major concern for business, particularly on tariffs.

Today’s Economic Data and Events

• 11:00 GE factory orders m/m Oct: forecast -2%
• 17:30 US initial jobless claims Nov 30: forecast 215k

Fixed Income

• US Treasuries were higher overnight with gains across the curve. The 2yr UST yield fell by 5bps to 4.1256% while the 10yr yield was lower by 4bps to 4.18%. Market pricing is for a 74% probability of another 25bps cut at the December 18 FOMC meeting.
• Bond markets generally were positive overnight with gains in emerging market and high yield bonds.

FX

• The US dollar was flat at the close overnight with a focus more on political developments in South Korea and France. EURUSD held to a fairly tight range and managed to end the day at 1.0511, virtually unchanged. GBPUSD rose by 0.2% to 1.2701 while USDJPY gained by 0.7% to close at 150.59.
• Commodity currencies fared worse with declines across the board. AUDUSD fell by 0.9% to 0.6430 while NZDUSD dropped by 0.5% to 0.5851.

Equities

• Global equity markets had a generally positive session overnight. The Down Jones index added 0.7% at the close while the S&P 500 gained 0.6% and the NASDAQ managed gains of 1.3%. European markets were generally higher, with the Euro Stoxx index up 0.8% while the FTSE stumbled, dropping by 0.3%.
• Local markets also closed higher with the DFM up 0.1% and the ADX rising by 0.5%. The Tadawul rose by 0.6%.

Commodities

• Oil prices fell overnight as the market continues to watch for the latest developments from OPEC+. Brent futures fell 1.8% to USD 72.31/b while WTI was lower by 2% at USD 68.54/b.
• Weekly data from the EIA showed a draw of more than 5m bbl in commercial crude inventories though that was offset to a degree by builds elsewhere across the barrel. Oil production was higher by 20k b/d to 13.51m b/d while product supplied pulled back by 500k b/d.