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Daily Economic Update
09.12.2025
US: Consumers’ inflation expectations steady; US LT bond yields now firmly higher than when the Fed started its easing cycle last year. According to a New York Fed survey, consumers’ year-ahead inflation expectations in November were steady at 3.2%, and those for three- and five-year-ahead horizons were also unchanged at 3% each for the third consecutive month. The survey noted that perceptions about households’ current financial situations “deteriorated notably,” while fewer respondents saw them being better off over the next year. Debt delinquency expectations rose further, reflecting a higher probability of missing the minimum debt payment over the next three months and views about credit access worsened. However, outlooks for the labor market improved somewhat, with a lower probability of losing one’s job and slightly easing though still elevated expectations of the unemployment rate level over the year ahead. Overall, the inflation and job outlooks for 2026 have become more complex, which are also being reflected in consumers’ diverging views as well as those among Fed officials. Though the FOMC will likely cut the interest rates by 25 bps this Wednesday, members’ differing opinions mean the path ahead is difficult to ascertain. We note that since the Fed commenced its current easing cycle in September 2024, cutting by a cumulative 150 bps plus a near-certain 25 bps cut tomorrow, US long-term bond yields have firmly increased over the same period; the 10-year yield is up by around 50 bps, and the 30-year yield is up by more than 80 bps. This indicates that the US bond market, likely concerned about the fiscal trajectory and ongoing sticky above-target inflation, is not convinced about the need for such easing by the Fed.
Kuwait: Government approves KD1.2 billion contract for Mubarak Al-Kabeer port. According to media reports, the Central Agency for Public Tenders approved a KD1.2 billion contract for the engineering, supplies, and construction works to complete Phase 1 of Mubarak Al-Kabeer seaport with China Communications Constructions Company (CCCC). This marks a concrete step in the government’s attempts to quicken the execution of large-scale projects, with the port expected to be operational by end-2026. The direct award to CCCC falls within the broader Kuwait-China framework cooperation agreements reached this year and follows up on the contract signed with the firm in February for study, design, and provision of pre-implementation services for the port. The renewed momentum also reflects a strategic shift toward accelerating long-delayed infrastructure works aligned with Vision 2035.
Saudi Arabia: Q3 GDP growth revised down slightly in second estimates. GDP growth was slightly revised down to 4.8% y/y in Q3 from 5% in the second estimate of economic activity published by GASTAT. This is the fastest headline growth rate since Q424 and up from an upwardly revised 4.5% in Q2. Oil sector output rose by 8.3% y/y, as the kingdom unwound its OPEC+ voluntary production cuts. Non-oil growth was also revised slightly down from the initial estimate to 4.3%, supported by the continued strong expansion in the manufacturing and the wholesale/retail trade/hospitality sectors, which grew by 7% and 5.2%, respectively. From the expenditure side of the national accounts, net exports more than tripled on the back of an 18% y/y jump in exports (partly from oil), which far outpaced the increase in imports (4.3%). Additionally, headline growth was supported by continued strong investment momentum in the non-oil private sector (+8.5% in Q3), which is the fastest pace since Q123. We expect the economy to grow by 4.5% and 5% in full-year 2025 and 2026, respectively, supported by recovering oil output and continued investment-driven non-oil sector strength.
Egypt: Egyptian pound softens despite steady portfolio inflows into sovereign debt. The Egyptian currency came under mild depreciation pressure in November, weakening by 0.8% m/m, despite ongoing resilience in portfolio inflows into the sovereign debt market. According to data from the Egyptian Exchange (EGX), net portfolio inflows into the secondary market for government debt reached $1.7 billion in November, up from $1.4 billion in October, extending a seven-month streak of relatively stable inflows even amid external shocks. The recent FX movement appears to be driven more by seasonal FX demand rather than capital outflows, as several corporates began repatriating part of their profits toward year-end to their parent companies. This highlights that the current FX dynamics are increasingly shaped by real-sector transactions rather than abrupt shifts in foreign portfolio flows. Historically, one of Egypt’s main macro vulnerabilities has been its high exposure to “hot money”, particularly in the treasury market. A wide interest rate differential versus funding markets in the US, Europe, and Japan previously made Egypt an attractive carry-trade destination—bringing in large but highly volatile short-term flows that tended to reverse quickly during periods of stress. With Egypt currently undergoing monetary easing, upcoming policy rate cuts should gradually be reflected in treasury yields. This underscores why the Central Bank of Egypt will likely pace rate cuts cautiously, balancing support for growth with preserving portfolio flow stability and avoiding renewed FX volatility.
