Good morning, folks: We have another packed issue for you this morning, so let’s jump into it.

PSA #1- Registration for the expat car-for-FX initiative officially kicked off yesterday after a bill to relaunch the scheme was signed into law earlier in the day, the Immigration Ministry said in a statement. Expats can sign up via the government app on Google Play and the App Store.

PSA #2- We’ve got a few more foggy mornings ahead: The nation-wide heavy fog that takes over the streets during the early hours of the morning will continue until Sunday, according to the Egyptian Meteorological Authority. The EMA also forecasts light to moderate rain in various parts of the country in the coming days.

It’s interest rate week: The Central Bank of Egypt is expected to leave interest rates unchanged when it meets on Thursday, according to a majority of the analysts we spoke to for our customary poll. Analysts participating in a Reuters poll shared the same outlook, with the median forecast being that the CBE will leave rates on hold as the government tries to stabilize the market ahead of the December presidential election and the ongoing crisis in Gaza. This echoes Standard Chartered ’s stance, which sees no interest rate changes or devaluations before the end of the year.

Before that: The Federal Reserve is kicking off its two-day policy meeting today. The market is pricing in a 99.5% chance that the Fed keeps rates on hold as inflation tempers and the war in Gaza triggers fresh uncertainty for the global economy.

^^ Check out the poll in the news well, below.

WATCH THIS SPACE-

Our upcoming aid package from the EU could mean more grain shipments: Egypt could be getting more Ukrainian grain or fertilizers as part of a wider support package from the EU to help Egypt mitigate a potential uptick in migration to Europe resulting from the ongoing war on Gaza, the Financial Times wrote. The move is part of a wider agreement in the works that would also cover border management and economic support from the bloc.

The big question: Does any of this relate to Israel’s plan to displace Palestinians into Egypt? Israeli prime minister Benjamin Netayahu is pushing EU countries to support plans to forcibly displace Gaza’s 2.3 mn citizens into Egypt. Egyptian officials have vehemently rejected any such idea and, according to the FT, German Chancellor Olaf Scholz believes them. Still, the idea has received a positive response among some of the bloc’s member states, who are talking about raising pressure on Cairo to accept refugees.

^^ We have more in this morning’s War Watch, below.

THE BIG STORIES ABROAD-

The war in Gaza continues to dominate global attention this morning, with Reuters, the Associated Press, the Financial Times and the Washington Post all covering Israel’s ongoing ground offensive in the besieged territory. The fog of war is in full effect, with few details being reported about the fighting between the IDF and Hamas, though unconfirmed reports earlier yesterday suggested that the IDF was attempting to surround Gaza City.

Meanwhile: The New York Times leads with a piece on the Biden administration’s discursive shift which has seen officials tone down the hawkish rhetoric and emphasize the protection of civilians (but do nothing to prevent the Israelis from killing them). Turns out displays of indifference to war crimes and attempts to discredit the Palestinian death count don’t play too well to, well, most of the world.

ALSO- Apple unveils new line of MacBooks. Alongside the war on Gaza and its implications on global markets (which we dive into in the news well, below), the business press is focused on a new line of Apple products hitting the market soon. In a presentation yesterday, Apple unveiled new M3 chips, MacBook Pros, and a new iMac model that will hit the market between next week and late November. (CNBC | Bloomberg | Reuters | Wall Street Journal)

MARKET WATCH-

Escalation in Gaza could shake up the global economy: “The higher the risk of escalation [in Gaza], the higher the risk of contagion to the rest of the world in terms of economics and finance,” Allianz Chief Economist Mohamed El Erian said, according to CNBC. El Erian pointed to the already fragile global economy struggling with stagnating growth, high inflation, and the broader fragmentation of markets, adding that the war “amplifies all of the challenges.”

One sector is already feeling the heat of the war: European gas prices have risen some 40% since the war on Gaza broke out on 7 October, Euronews reported. Gas prices in the region have been reacting drastically to war developments, with benchmark Dutch TTF rallying almost 7% in early trading, before cooling off, in response to the news of Israel halting all gas exports to Egypt, pushing the country’s gas imports to zero from a previous 800 mn cubic feet of gas per day. Last year Egypt and Israel inked a gas export agreement with the EU, under which Israel agreed to send more gas to Egypt’s LNG facilities before exporting it on tankers to European shores. The agreement came amid European efforts to phase out the continent’s reliance on Russian gas.

Oil prices are also at risk: The World Bank sees oil prices soaring as high as USD 140-157 a barrel if the war escalates to cause “large disruptions,” which would shrink global oil supply by 6-8 mn bbl / day, it said in a press release. The Bank sees prices jumping to USD 109-121 a barrel in the case of a “medium disruption” and to USD 93-102 a barrel in the case of “small disruptions.” Prices have so far risen 6% since the start of the conflict in Gaza. The World Bank’s current forecast puts prices at USD 90 a barrel in 4Q 2023 and at USD 81 a barrel in 2024.

Meanwhile, in Egypt: US asset manager VanEck’s Egypt Index rose 19% last week, marking its best weekly performance since June 2012, before falling 3% during trading yesterday, Reuters wrote. The VanEck Egypt Exchange-Traded Fund saw the highest amount of inflows in seven months on Thursday, with net inflows of USD 1.2 mn. “Egypt (stock market) is up more because of local investors looking for a hedge for high inflation, rather than a revisit by foreign investors, who remain concerned about devaluation,” Tellimer’s Hasnain Malik told Reuters. The EGX30 surged to a record highyesterday to settle at 23.4k points for the first time ever.

Investor fears seem to have calmed down with the S&P 500 rising 1.2% yesterday, marking its biggest one-day gains since August after it slipped into correction last week. The tech-dominated Nasdaq Composite also rose 1.2%, while the Euro Stoxx gained 0.4% following two weeks of losses.

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