Microsoft commits to mega investment in the UAE

The UAE has secured a major investment from Microsoft who will spend nearly USD 8bn on AI and digital infrastructure and staff in the country. The announcement follows Microsoft gaining an export license to ship advanced Nvidia chips to the UAE. Brad Smith, president of Microsoft, said he expected the company would need more export licenses for the company’s investment in the UAE. The US government has approved the sale of chips to US companies operating in the UAE but has still not approved direct export to UAE firms.

Turkish inflation eased in October to 32.9% y/y, slower than markets had been expecting and down from 33.3% a month earlier. On a monthly basis, inflation rose by 2.6%, down from 3.2% a month earlier. Clothing prices were the most notable increase m/m with a 12% gain while education prices were flat m/m after a jump a month earlier. Food price inflation remains elevated at almost 35% y/y in October. The CBRT will publish its next inflation report on November 7 with any change to the bank’s inflation targets and forecasts in focus. The next CBRT rate decision is not until December 11 with the next inflation print for November out on December 3.

The UAE’s energy minister, Suhail al Mazrouei, said that he saw more demand for oil in 2026 as for projections of an oil market surplus in 2026 he “can’t see that.” Minister al Mazrouei was speaking during the Adipec event in Abu Dhabi. Separately, Sultan al Jaber, CEO of ADNOC and the UAE’s minister of industry and advanced technology, projected substantial investments required in energy production to meet the growing demand from data centres globally.

In the US the ISM manufacturing index fell to 48.7 for October, spending the last eight months in a row in contraction. The production and employment sub-components both remained weak last month though input prices dropped, albeit from high levels.

Fed governor Lisa Cook said US monetary policy was “not on a predetermined path” and that “every meeting, including December’s, is a live meeting.” Cook also noted that the labour market can “deteriorate very quickly” and that the “downside risks to employment are greater” than inflation at this moment.

China’s private sector manufacturing PMI dropped to 50.6 in October, down from 51.2 a month earlier. There was a decline in new export orders as well as overall optimism. The US and China reached a temporary trade deal last week that lowered US tariffs on imports from China and delayed export controls from the US on tech products.

Today’s Economic Data and Events

08:15 KSA S&P Global PMI Oct

Fixed Income

US Treasury yields started the week moderately higher with the 2yr yield up 3bps at 3.6045% and the 10yr at 4.1104%, up 3bps.

Qatar priced a USD 1bn 3yr bond at +15 and a USD 3bn 10yr sukuk at +20.

Jordan is planning to tap markets with a USD 7yr issuance.

AviLease has mandated banks for a USD 5yr bond.

National Bank of Kuwait priced a USD 300m 10.25yr at T+150.

Ittihad has mandated banks for a 5yr USD sukuk.

FX

The US dollar maintained its edge at the start of the week with gains across all peers. EURUSD slipped by 0.2% to 1.152 while GBPUSD dropped by a bit less than 0.1% to 1.314. Markets will be watching for the Bank of England later this week though more focus is on the fiscal outlook for the UK economy. USDJPY added 0.15% to 154.22 while commodity currencies were broadly weaker; CAD will be in focus later on the release of the Canadian budget.

In emerging currencies prices were stable. The Turkish lira settled at 42.0586 even amid softer than expected inflation, the Indian rupee closed at 88.78 and the Egyptian pound was flat at 47.5.

Equities

US equities had a mixed session with the Dow Jones falling by 0.5% while the S&P 500 managed to gain 0.2% and the NASDAQ was 05% higher. European markets were mixed with the Euro Stoxx up 0.3% while the FTSE 100 fell 0.2%.

In local markets the DFM declined by 0.7% while the ADX 15 fell 0.9%. The Tadawul was also weaker by about 0.5%.

Commodities

Oil markets were mixed to start the week with a 0.3% drop in Brent markets to USD 64.89/b offset by a 0.1% gain in WTI to UDS 61.05/b. Price moves in industrial metals were limited with gold holding steady at about USD 4,000/troy oz while aluminium pushed higher with copper and iron ore dipping slightly.