Egypt's reserves hit new record high

Egypt’s net reserves rose to USD 49.53bn in September, a new record. This was up from USD 49.25bn the previous month as Egypt’s finances continue to improve – after jumping from USD 35.31bn in February 2024 to USD 40.36bn the following month after the UAE pledged to invest substantial sums in the country, net reserves have continued to tick upwards at a steady pace.

Eurozone retail sales rose 0.1% m/m in August, compared with the 0.4% contraction recorded the previous month (changed on the second reading from -0.5% on the initial print). Sales were 1.0% higher than in August 2024. On other Eurozone data there was an improvement in the Sentix investor confidence index to -5.4 in October. The current situation remains sharply negative at -16.0, although this is a modest improvement on September’s -18.8. There was a sharper improvement in the expectations component which rose to 5.8 in October, recovering after dipping to just 0.8 the previous month.

Today’s Economic Data and Events

10:00 Germany factory orders, % m/m, August. Forecast: 1.2%

Fixed Income

• Yields rose across the curve in the US yesterday amidst the ongoing government shutdown. The 2yr added 1bps to close at 3.5883%, while the 10yr yield closed 3bps higher at 4.1520%.
• PIF has mandated banks for a dual tranche green EUR issuance in 3yr and 7yr tenures.
• Dubai Aerospace has mandated banks for a 5yr USD sukuk.
• Burgan Bank is pricing a USD benchmark 5yr bond.

FX

• The dollar started the week on the front foot after last week’s sell-off, closing up 0.4% on the day. These gains were all driven by a weakening JPY, however, which weakened 2.0% against the greenback to close at 150.35, breaching the 150 mark for the first time since July.
• EUR also lost ground against the USD as questions mounted over France’s political stability as another prime minister resigned. It fell 0.3% to 1.1711. Other currencies were up slightly against USD with GBP closing up modestly to 1.3485 and CHF up 0.1%.

Equities

• Political fallout weighed on French equities and the CAC closed down 1.4% on the day. By contrast, the victory of pro-business Sanae Takaichi in the LDP vote over the weekend saw Japanese stocks soar and the Nikkei hit a new record as it closed up 4.8% on the day.
• In the US, the Dow Jones closed down 0.1% but the S&P 500 added 0.4% and the NASDAQ gained 0.7% as the technology rally remained in play.
• Locally, the ADX fell 0.1% and the DFM 0.2% while in Saudi Arabia the Tadawul closed 0.7% higher.

Commodities

• Oil prices gained at the start of the week with both benchmarks settling higher on Monday. Brent futures added 1.5% to close at USD 65.5/b while WTI closed 1.3% higher at USD 61.7/b.