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Daily Economic Update
06.10.2025Oil: OPEC-8 continues to raise supply despite 16-week low in prices. OPEC’s Group of Eight (OPEC-8) agreed yesterday to raise output again in November, marking a seventh consecutive monthly increase that could deepen the market surplus ahead of the seasonally weak demand period in Q4 2025–Q1 2026. The group continued unwinding the remaining tranche of voluntary cuts (totaling 1.65 mb/d) announced in April 2023, lifting production quotas for next month by 137 kb/d. The largest increases came from Saudi Arabia (+41 kb/d) and Russia (+41 kb/d), followed by Iraq (+18 kb/d), UAE (+12 kb/d), and Kuwait (+10 kb/d). The group reaffirmed that the current policy stance is supported by a steady global economic outlook and healthy market fundamentals vis-à-vis low inventories but emphasized its flexibility to pause or even reverse hikes as necessary. The current approach of making output decisions on a month-by-month basis marks a departure from the group’s previous plan to restore the 2.2 mb/d voluntary cut tranche within a fixed 18-month period (later shortened by a year), suggesting that falling oil prices from oversupply is prompting a more cautious recalibration. Meanwhile, Brent futures fell 8.1% w/w last week to $64.5/bbl — a 16-week low — pressured by media reports that OPEC-8 may increase output faster than expected despite the upcoming seasonally weak oil demand period, further exacerbated by reports of weekly commercial stock buildups in the US. Brent was back above $65/bbl in Asian trading this morning, however, with markets apparently relieved that OPEC-8 did not go for an even larger output increase in November.
Global: US shutdown risk, heavy Fed speak, and Japan’s market surge. In the US, government shutdown developments remain in focus this week, alongside a heavy lineup of Federal Reserve speakers with at least eight FOMC members, including Chair Powell on Thursday. The shutdown continues to disrupt economic data releases, with August trade data (Tuesday) and weekly jobless claims (Thursday) among the key reports likely to be delayed if the shutdown continues. Meanwhile, the FOMC’s September meeting minutes are scheduled for release on Wednesday, offering insight into policymakers’ latest discussions on the rate outlook. In the Eurozone, August retail sales data will be released later today, with consensus expecting a modest +0.1% m/m rebound after a 0.5% decline in July. In the UK, it’s a relatively quiet week, with attention on the Halifax House Price Index (Tuesday), expected to rise 0.4% m/m following 0.3% growth in August. In Japan, August household spending (Tuesday) is forecast to rise 1.2% y/y, easing slightly from 1.4% in July. Market reaction this morning to the election of pro-stimulus candidate Sanae Takaichi as the new leader of the ruling Liberal Democratic Party has been dramatic: the Nikkei 225 surged over 4% to a fresh record high to the north of 47,000, 30-year JGB yields jumped more than 13 bps, and the yen weakened by around 2%, breaching the JPY 150/US$1 mark.
Qatar: Non-energy private sector activity moderates in September. Qatar’s non-energy private sector PMI eased to 51.5 in September from 51.9 in August, signaling a moderation in business conditions. The decline reflected continued weakness in new orders and subdued output growth, which offset near-record gains in employment. New orders contracted for the seventh time this year, though at a slower pace than in August, while overall output rose only marginally, weighed down by softness in the construction sector. Business sentiment moderated slightly, with firms’ 12-month outlook slipping to a two-month low, although optimism remained underpinned by expectations of further economic development and an improving real estate sector. Despite easing from record highs in August, employment growth remained strong, keeping staffing costs elevated, even as overall input costs declined for the second consecutive month. Meanwhile, selling prices rose modestly for the first time in 14 months.
UAE: Abu Dhabi non-oil growth strengthens still further in Q2 2025. Non-oil GDP growth accelerated in the Emirate of Abu Dhabi in Q2, posting gains of 6.6% y/y from 6.1% in Q1, supported by double-digit growth in finance & insurance (10.3% y/y), real estate (10.2%), and construction (9.7%) sectors especially. This positive momentum is expected to carry through over 2025-2026, with annual growth expected in the 4.5-5.0% range, augmented by manufacturing and tourism gains and underpinned by strategic investments and structural reforms. Oil activity, on the other hand, was up only marginally in Q2, by 0.4% y/y from 0.2% in the previous quarter. Given the accelerated unwinding of OPEC-8 supply cuts and the UAE’s higher production baseline (+300 kb/d), the oil sector is posed to stage a good recovery. Total GDP growth in Q2 came in at 3.8% y/y (3.4% in Q1).
Egypt: Credit growth outpaces deposits in August amid monetary easing. Egypt’s domestic bank credit grew by 31% y/y in August to reach EGP 15.5 trillion, outpacing deposit growth as the banking sector begins to respond to recent policy rate cuts. The government sector remained the primary driver, accounting for 57% of total credit, while lending to the private business sector, which represents 20% of total credit, grew by a slower 23% y/y. The softer private-sector credit growth likely reflects the timing of the policy cut, which came late in the month and typically takes several months to feed through to new lending. On the liabilities side, local currency deposits rose by 26% y/y to EGP 8.9 trillion, dominated by time and savings deposits (76% of total, excluding the government), largely held by the household sector, which expanded by 25% y/y. Meanwhile, foreign currency deposits grew by 15.5% y/y to $63.2 billion, driven primarily by the private business sector (17.5% y/y) and households (15% y/y). The household sector remains the largest contributor, accounting for around 60% of total foreign currency deposits (excluding the government).