EDWARD BELL
Head of Research
DIFC Branch – Dubai
T: +971 (4)387 5033
E: edward.bell@ae.mufg.jp

SOOJIN KIM
Research Analyst
DIFC Branch – Dubai
T: +971 (4)387 5031
E: soojin.kim@ae.mufg.jp

MUFG Bank, Ltd. and MUFG Securities plc

A member of MUFG, a global financial group

Middle East Daily

COMMODITIES / ENERGY

Oil pulls back as markets await next geopolitical catalyst. Oil prices are selling off in early trade today after rising to nearly USD 118/b at the end of last week. Brent futures are trading below USD 115/b while WTI is trading close to USD 101/b with both benchmarks down around 2% since the start of the week. US President Donald Trump gave no clear indication of supporting a new offensive against Iran in commentary he gave to the press over the weekend, saying that “it would be very easy” to “finish off” Iran but that he would also consider making a deal. With no material change in the geopolitical balance in the last several days, oil markets will be looking for the next catalyst to support another push higher. Time spreads remain well supported, particularly the prompt spread which straddles the period after the US midterm elections in early November, after which a renewed US strike against Iran appears widely expected.

Gold stabilises after sharp weekly selloff ahead of key Fed decision. Gold prices are stabilizing around USD 4,020/troy oz after dropping more than 4% last week, their largest weekly loss since June this year. A pull back in oil prices in early trade is helping to limit some inflation pass-through expectations though energy futures still remain elevated. The next major catalyst for gold markets will be the FOMC decision this week and whether the Fed shifts its tone to more overtly hawkish. The October 28 decision is essentially entirely priced out by markets while the December meeting has about 21bps of hikes priced in. Gold prices may also fall victim to sell-offs in risk assets as investors sell down positions in AI-linked equities.

MIDDLE EAST - CREDIT TRADING

End of day comment – 23 October 2026. Quiet Friday capping off an eventful week. Cash prices in the morning were more responsive to overnights UST strength and moved higher. But day on day changes varied again a lot depending on credit/ market segment. In the IG universe the KSA complex continues to underperform, today closing +2/3bp with most activity in the KSA 10y bucket where 36s conv closed -0.125pt/+2bp. At the other end of Spectrum ADGB is going out -2/3bp with most interest in long end bonds, 70s was active today closing +0.375pt/-2bp. In higher beta credits the big outperformer today was BHRAIN were bonds closed up to 1.5pt higher with front end bonds 35bp tighter and long end 20bp tighter. we close Bahrain -0.25pt off the highs as some sellers emerged into the close. New MASDAR 31s was well received closing 99.625/99.875 (-3bp) from 99.437 reoffer though activity was low, seen some international RM adding on the break before it went quiet in the afternoon. Risk markets remain on their toes with oil up, credit indices wider, tech spreads widening (SPCX today) and equities wobbling, high time for the weekend. (Source: Dominik Roth, Credit Trader)

MIDDLE EAST - MACRO / MARKETS

GCC hiring rebounds in Q3 as UAE leads regional recovery. Hiring across the GCC increased 2% in Q3 2026, reversing a 3% contraction in Q2, according to Cooper Fitch’s Gulf Employment Index, signalling a gradual recovery in regional labour market conditions. The UAE led the rebound with 4% growth, following a 4% decline in the previous quarter, while Saudi Arabia and Oman recorded modest increases of 1.5% and 0.5%, respectively. However, hiring continued to contract in Qatar (-1%), Kuwait (-2%) and Bahrain (-2%), highlighting an uneven recovery. By sector, energy hiring rose 7%, supported by the resumption of previously suspended recruitment, while strategy and senior finance positions increased 6% each. In contrast, banking and investment management hiring declined 4% and 5%, respectively. While the rebound suggests improving labour market resilience, persistent weakness in financial-sector hiring and uneven country-level performance indicate that the regional employment recovery remains fragile amid broader economic uncertainty.

AfDB approves USD 487m to strengthen Morocco’s economic resilience. The African Development Bank (AfDB) approved a USD 487m financing package for the third phase of Morocco’s Programme to Support the Strengthening of Economic Governance and Resilience to Climate Change, aimed at enhancing economic resilience and accelerating structural reforms. The programme focuses on strengthening public-sector governance, promoting private-sector investment and improving access to financing for small and SMEs. Additional measures aim to expand industrial hubs, strengthen trade infrastructure and deepen the integration of Moroccan industries into global value chains, reinforcing the country’s position as a commercial gateway between North Africa and Europe. The financing should support Morocco’s economic diversification, private-sector competitiveness and climate resilience, while improving its capacity to withstand external shocks.