23 November 2022
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UAE launches Vision 2031 strategy

By Daniel Richards

  • The UAE has launched the new Vision 2031 strategy, outlining the economic growth objectives for the next decade. Key takeaways from the announcement include the aim to double GDP to AED 3tn and to double the number of tourists each year to 40mn. Economic diversification efforts will continue with a plan to boost non-oil exports to AED 400bn.
  • Dubai's CPI inflation slowed to 4.5% y/y in October from 5.4% in September as consumer prices declined -0.6% m/m. The main driver was a -7.9% m/m fall in transport costs, likely due to lower petrol prices.  Food and housing costs rose m/m in October however, and with petrol prices having risen again in November, headline CPI is likely to tick up again in the next reading.
  • The OECD released its revised forecasts yesterday, warning that it expects global GDP growth to slow from a projected 3.1% this year to 2.2% next year – lower than the IMF’s forecast of 2.7% but the OECD shared the IMF’s view that growth in the Eurozone will be among the weakest next year with a forecast growth rate of just 0.5%. Both Germany and the UK are expected to contract. Of the world’s largest economies, growth is expected to be driven by China (4.6%), Indonesia (4.7%) and India (5.7%), while Saudi Arabia is forecast to expand by 5.0%. Despite the deteriorating growth outlook, the OECD urged central banks to stay the course with their monetary tightening, warning that further action was needed to ‘firmly anchor inflation expectations.’
  • The RBNZ hiked its benchmark interest rate by 75bps this morning, as anticipated. This record hike takes the official cash rate to 4.25% and the central bank signaled that there was more yet to come as it steps up its fight against inflation – its projections show the terminal rate at 5.5% in Q323, compared to its previous projection of 4.1%.
  • Retail sales in Canada contracted -0.5% m/m in September, in line with expectations. Stripping out auto fuels the contraction was -0.7%, slightly greater than the consensus projection of 0.6%. The majority of subsectors, accounting for around 75% of sales, saw a contraction, illustrating the pressures households are coming under in the face of higher inflation and higher interest rates.
  • Morocco CPI inflation hit 8.1% y/y in October, down modestly from the 8.3% recorded in September but still elevated compared with the long period of low and stable inflation prior to this year. Prices were 0.4% higher m/m.

Key Economic Data and Events

  • 12:15 France S&P Global manufacturing PMI, November. Forecast: 47.0
  • 13:00 Eurozone S&P Global manufacturing PMI, November. Forecast: 45.0
  • 13:30 UK S&P Global/CIPS manufacturing PMI, November. Forecast: 45.8
  • 17:30 US initial jobless claims, week to November 19. Forecast: 225,000
  • 17:30 US durable goods orders, % m/m, October. Forecast: 0.4%
  • 19:00 US new home sales, October. Forecast: 570,000

Fixed Income

  • US Treasuries pulled higher overnight even as there was little in the way of material catalyst to support bonds. Yields on the 2yr UST dropped almost 4bps to 4.5145% while the 10yr yield fell 7bps to 3.7559%. Loretta Mester, president of the Cleveland Fed, said overnight that inflation was the “number one focus” of the FOMC while Esther George from the Kansas City Fed said that high savings for consumers means rates can move higher.
  • European bonds also closed higher overnight with bund yields down by 1bps to 1.972% and 10yr gilt yields falling about 5bps to 3.129%.
  • Dubai Islamic Bank priced a 5yr USD 750m sukuk at UST+155bps, tighter than initial pricing.
  • Fitch affirmed their rating on Mamoura at ‘AA’ with a stable outlook.


  • Currency markets returned to dollar weakness overnight, taking their cue from the drop in US Treasury yields. The broad dollar index fell by 0.6% with EURUSD accounting for much of the gain: the pair added 0.6% to 1.0304 overnight. USDJPY dropped by 0.6% to 141.23 while GBPUSD added 0.5% to 1.1886.
  • Commodity currencies were broadly stronger overnight with USDCAD down 0.6% at 1.3374 while AUDUSD added 0.7% t 0.6649. NZDUSD rallied strongly overnight, up 0.9% to 0.6154 and is moving higher in early trade today following the RBNZ’s 75bps hike; the South Pacific central bank also discussed a 100bps hike.


  • The Covid-19 situation in China continued to weigh on the Hang Seng index yesterday, which fell -1.3%, but the Shanghai Composite managed to eke out a 0.1% expansion.
  • US equities headed higher with both the S&P 500 and the NASDAQ adding 1.4% while the Dow Jones gained 1,2%. This followed gains in Europe where the FTSE 100 closed up 1.0% and the CAC 0.4%.
  • Locally, the DFM lost -0.3% while the ADX lost -0.1% but Saudi Arabi’s Tadawul added 0.3%, buoyed by higher oil prices.


  • Oil prices improved overnight with a 1% gain in Brent futures to USD 88.36/b and WTI adding 1.5% to USD 80.95/b. The EU is reportedly considering giving some leeway on implementation of a price cap on Russian oil, to avoid catching out importers whose cargoes are still mid-journey when the cap comes into force. The EU has also unwound one of the more onerous impacts of the price cap; ships that carry Russian oil will only be prohibited from using EU services for 90 days following unloading, rather than indefinitely as previously indicated.
  • The API reported a major drop in crude inventories last week of 4.8m bbl along with a modest draw in gasoline stockpiles. EIA data will be out later this evening.

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Written By

Daniel Richards Senior Economist

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