+965 2224 8361
Daily Economic Update
20.11.2025
Egypt: CBE likely to hold rates today as it waits for clearer inflation signals. While market opinion is divided, we on balance expect the Central Bank of Egypt (CBE) to leave interest rates unchanged in today’s Monetary Policy Committee (MPC) meeting, opting for a pause while it assesses the full inflationary impact of the recent fuel price hike. Although headline inflation accelerated to 12.5% y/y in October, the published figures did not yet capture the effect of the recent fuel price adjustment, meaning the true extent of price pressures will only begin to appear in the November and December readings. Given this uncertainty, the CBE will likely prefer to wait for clearer data before resuming its easing cycle. Despite real interest rates hovering around a high 10%, providing ample room for a rate cut, the CBE is expected to prioritize credibility and inflation targeting at this stage. A policy pause today would also align with the broader macro framework ahead of the upcoming IMF mission, which is set to conclude the fifth and sixth program reviews. Maintaining a tight monetary stance reinforces Egypt’s commitment to the inflation-targeting regime and supports the narrative of disciplined policy management – reinforced by ongoing strength in the Egyptian pound. In short, the CBE’s decision today will likely signal caution, data-dependence, and a continued focus on anchoring inflation expectations before shifting back to easing.
Saudi Arabia: MBS strengthens strategic ties with the US, major mining-sector expansion in parallel. Saudi Crown Prince Mohammed bin Salman concluded a high-profile visit to Washington, marking a significant step in strengthening US–Saudi economic and security ties. The visit resulted in several major agreements, including a $1 trillion pledge to invest in the US economy (up from a previous $600bn pledge), a deal for F-35 fighter jets, and the formal designation of Saudi Arabia as a major non-NATO ally, enhancing security cooperation. During an investment forum held on Wednesday, President Trump and MBS announced $270 billion in bilateral deals, notably HUMAIN’s purchase of 600,000 Nvidia AI chips, a partnership with Elon Musk’s xAI to build a 500 MW data center in the Kingdom, and new cooperation between MP Materials, the US Department of Defense, and Maaden to develop a rare earths refinery. In addition, Saudi Aramco signed 17 agreements with US firms valued at more than $30 billion. The investments are in line with long-term economic diversification goals, supporting the development of infrastructure for key strategic sectors including technology and AI, energy, and mining. Parallel to the strengthened US ties, Saudi Arabia is advancing its strategy to position mining as a key pillar of Vision 2030. The government has granted new licenses to several major global players, including India’s Vedanta, which plans to invest $2 billion in copper and gold processing, with operations expected to begin within 6–8 months. China’s Zijin Mining Group is committing $1.3–1.6 billion toward a zinc smelter, lithium carbonate facility, and copper refinery. Additional interest from Hancock Prospecting and Barrick Gold further underscores Saudi Arabia’s ambition to transform its mining sector and tap into an estimated $2.5 trillion in mineral resources.
UK: October CPI inflation eases in line with forecasts. CPI inflation in October moderated to 3.6% y/y from 3.8% in September, matching the consensus as well as the Bank of England (BoE)’s forecasts, as softer inflation in housing and energy costs more than offset the acceleration in food and beverages prices. The core rate also eased to a seven-month low of 3.4% from 3.5%. The disinflation progress was largely broad-based as both the goods and services measures slowed to 2.6% and 4.5% from September’s 2.9% and 4.7%, respectively, with the latter now at a 10-month low. On a monthly basis, headline and underlying price rises stood at 0.4% m/m and 0.3%, respectively. Though inflation is still elevated and much above the BoE’s 2% target, the deceleration was in line with the bank’s outlook suggesting that MPC members may increasingly tilt towards supporting the lackluster economy and weak employment conditions. Pricing in the futures market indicates around an 85% probability for a 25-bps bank rate cut at the MPC meeting in December.
US: FOMC meeting minutes show diverging views among policymakers; BLS cancels October jobs report and delays the November one. FOMC participants were divided about the monetary policy stance that needs to be taken in December, minutes from the October 28-29 meeting showed, at which the Fed reduced interest rates by 25 bps. While “many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year,” “several” others pitched for further easing, saying a cut “could well be appropriate in December if the economy evolved about as they expected.” In Fed parlance, “many” is more than “several” indicating a tilt for keeping rates on hold in December, although the key decisive matter is what the FOMC voters think as opposed to the FOMC participants. We note that the latest Fed speak has further underscored the growing divide about another rate cut at the December meeting amid different views about the job market and inflation outlooks. Meanwhile, the Bureau of Labor Statistics (BLS) has cancelled the publication of the full non-farm payroll report for October and the JOLTS report for September and delayed the November jobs report (now to be published on December 16, instead of the originally scheduled December 5). However, it will release specifically the October jobs data (collected through the establishment survey) along with the November report but will not provide household survey data (including the unemployment rate) for October as those surveys were not conducted due to the government shutdown. The bottom line is that the September non-farm payroll report (to be released later today) is the last major economic release before the FOMC’s December 9-10 meeting. As Fed Chair Powell advocated to be cautious in the absence of official job and inflation indicators, the market pricing has dramatically shifted in favor of a hold in policy rates, seeing a less than 30% chance of a rate cut next month.
China: PBoC holds key lending rates steady, tensions with Japan remain elevated. As widely anticipated, the People’s Bank of China (PBoC) left its benchmark lending rates steady for a sixth consecutive month today, keeping the one-year loan prime rate (LPR) at 3.0% and the five-year LPR – the benchmark for mortgage rates – at 3.5%. In parallel, recent tensions with Japan over remarks made on Taiwan by the Japanese prime minister remain elevated and have begun to strain economic ties. Beijing had warned Chinese citizens to avoid traveling to Japan and might reimpose bans on Japanese seafood imports and films. This heightened friction could further disrupt bilateral trade and investment flows, including in high-tech sectors where Japan is a key supplier of advanced components. Continued escalation will dampen regional sentiment and have an impact on economic growth, particularly for Japan.