Suez Canal revenues fall on shipping disruption

Disruption to Red Sea shipping has impacted Suez Canal revenues for Egypt, as they fell 23.4% y/y to USD 7.2bn in fiscal 2023/23 (July to June), from USD 9.4bn the previous fiscal year. The number of vessels passing through also decreased, to 20,148 from 25,887. From January onwards the y/y decline was nearly 50%.

German factory orders fell 5.8% m/m in August, a far greater decline than the predicted 2.0% fall, although more positively the July figure was revised up to a 3.9% expansion, from 2.0% on the initial print. On an annual basis, orders were down 3.9%.

CPI inflation in Bahrain slowed modestly to 0.9% y/y in August, down from 1.1% the previous month. This was the third month in a row that price growth has moderated, as food prices fell 0.8% y/y, offset by a rise in utilities prices that were up 0.6% y/y. Inflation has averaged 1.0% over the year-to-date.

Today’s Economic Data and Events

10:00 Germany industrial production, % m/m, August. Forecast: 0.8%

Fixed Income

• The sell-off in US treasuries continued yesterday, with yields on the 10yr hitting 4.0% for the first time since August. At the close, it was up 6bps on the day at 4.0256%. The 2yr closed just shy of 4.0% at 3.9952%, up 7bps.

FX

• The dollar index closed higher for a sixth straight session yesterday, although the gains were less than 1bps and the performance against its peers was fairly mixed.
• CHF and JPY both gained against the greenback, by 0.5% and 0.3% respectively, while EUR closed almost flat, but the other majors closed lower. GBP dropped 0.3% while the commodity currencies also weakened, with AUD and NZD both down 0.6%.

Equities

• It was a mixed day for global equity markets yesterday. In the US, all three major indices closed lower as rate-cutting bets continued to ease. The Dow Jones, the S&P 500, and the NASDAQ fell 0.9%, 1.0%, and 1.2% respectively.
• There was more positivity in Europe. The Dax closed down 0.1% but there were gains elsewhere, with the FTSE 100 adding 0.3% and the CAC 0.5%.
• Locally, the DFM dropped 0.3% and the ADX 0.4%. Saudi Arabia’s Tadawul closed up 1.2%, while Egypt’s EGX 30 gained 0.3%.

Commodities

• Oil prices gained for a fifth straight session yesterday as Brent futures added 3.7% on the day to close at USD 78.1/b, the first close above 80 since August. WTI also climbed 3.7% to close at USD 77.1/b.
• The gain in prices has been driven by headlines rather than fundamentals, and prices have been falling once again on the open today. Trades will be watching developments out of the Middle East and any further new on China stimulus as it reopens from the holiday.