Admit it: You didn’t expect to see inflation at single digits last month. Annual inflation plunged to three-year lows in June, hitting single-digit figures for the first time since March 2016. Capmas data shows that inflation fell to 9.4% last month from 14.1% in May.

Will this have any impact on the central bank’s decision on interest rates? It’s unlikely. Economists we spoke to yesterday still overwhelmingly agree that the Monetary Policy Committee will choose to leave rates on hold when it meets later today. However, Pharos has now joined Naeem Brokerage in predicting a 100 bps rate cut. Eight of nine economists we polled prior to the release of the new inflation data forecast a hold, while a Reuters survey produced similar results, with 14 of 15 respondents saying the same. We have chapter and verse in this morning’s Speed Round, below.

New export subsidies framework that could see brand new incentives tied to Africa exports could be revealed next week,unnamed government sources tell the local press. The new framework to disburse export subsidies currently being drafted by the government could see exporters receive advantages in land allocation and land prices for their projects. Those who export to new markets, such as East Africa, might also receive further incentives, said the head of the construction materials export council Walid Gamal El Din.

It would appear the government is transitioning export subsidies payments from a cash-based program to an incentive-based program. The finance and trade ministries held meetings last month to discuss allowing exporters to net overdue subsidies off against their taxes. The move comes as part of the government’s effort to make good on what is claimed to be some EGP 12 bn owed to Egyptian exporters by the Export Subsidy Fund since last year. Sources said that 80 companies are expected to be paid overdue export subsidies (in one form or another) over the coming three months.

The House of Representatives’ general assembly is expected to vote on amendments to the controversial “old rent” law today, according to Al Mal. The amendments, which would subject commercial tenants with leases signed prior to 1996 to an instant 5x hike in rent and a 15% annual increase for five years, stirred up quite the debate when House Speaker Ali Abdel Aal insisted that the law be applicable to individuals as well as companies. The majority of representatives appear to have rejected Abdel Aal’s proposal, arguing that the move would be burdensome in a high-inflation environment.

Across the pond, expectations for the first interest rate cut in the US in a decade are growing stronger after US Federal Reserve Chair Jerome Powell said concerns over the economic outlook have not dissipated in recent weeks. “Though the U.S. government reported strong job growth for June, other major economies’ ‘data have continued to disappoint. That is very broad across Europe and around Asia, and that continues to weigh,’” Powell said in his testimony before the House Financial Services Committee yesterday, according to Reuters. The trade riff with China has also been weighing on the American economy, and agreeing to restart talks with Beijing is positive, but “doesn’t remove the uncertainty,” he said.

Powell’s message was reinforced by the minutes from the Fed’s policymaking committee’s last meeting, in which officials said “a rate cut could be warranted ‘in the near term’ if uncertainty persisted,” the New York Times says. The Fed next meets on 30 and 31 July.

Investors are “warming” to EM fixed income: Growing certainty about the US Federal Reserve’s policy direction combined with last week’s trade ceasefire between the US and China is good news for EM bonds, Mark Matthews, MD and head of Asia research at Bank Juluis Baer, told Bloomberg (watch, runtime: 2:34) “People are warming to the EM asset class on the fixed income side… We like both local currency and USD. The spread between the two is tight enough that buying USD isn’t going to deteriorate your returns that substantially,” he said.

Morgan Stanley could give EM bonds a boost. Morgan Stanley’s report earlier this week advising investors to get out of equities and into EM bonds could draw more attention to the asset class. An article on Seeking Alpha points out that the yields offered by emerging bond ETFs are considerably more attractive than other passively managed bond funds. JPMorgan’s EM bond ETF is currently yielding 5.27% while Vanguard’s ETF has a 5.22% yield, providing a better return than many US junk bonds.

A consortium led by British private equity firm CVC Capital Partners has agreed to acquire 30% of Dubai-based GEMS Education, according to the Financial Times. The stake is currently held by another consortium led by Dubai’s Fajr Capital, which includes funds managed by Bahrain’s sovereign wealth fund Mumtalakat and US PE firm Blackstone. GEMS is one of the largest education providers in emerging markets.

The US is looking for an Iran agreement — but could still impose more sanctions: The White House is looking to replace the 2015 Iran nuclear accord with a Congress-approved agreement, but could introduce yet more economic sanctions against Tehran, US Special Representative for Iran Brian Hook said yesterday, Reuters reports. Iran swiftly shot down the idea, with Foreign Minister Mohammad Javad Zarif saying that “negotiations are never possible under duress,” according to Bloomberg. Tehran refused to back down on its nuclear breach unless Europe gives it full economic support, the Guardian says.

Egypt keen to dial back tensions: Egypt is opposed to conflict with Iran due to the potential knock-on effects in the Gaza strip, unnamed officials told Ahram Online. The sources voiced concern that Iran could attempt to unwind the fragile truce between Hamas and Israel that Egypt helped to broker earlier this year.

In global miscellany:

• Trump makes a soft U-turn on Huawei: The US will issue licenses to companies wanting to sell American-made products to Huawei provided that it does not harm national security, Commerce Secretary Wilbur Ross said yesterday, according to CNBC.
• Britain’s ambassador to the United States, Kim Darroch, resigned yesterday after the leak of diplomatic cables earlier this week in which Darroch called the Trump administration “inept,” among other criticisms, the Associated Press reports.
• Turkey isn’t looking so good: Actions taken by Turkish President Recep Tayyip Erdogan, including ousting the central bank chief, could cause the country’s economy to collapse, Ashmore Group has warned, Bloomberg says.

PSA- The Harvard Business School admissions team is coming to Cairo for the first time to host an information session for prospective MBA students on Wednesday, 17 July at the Greek Campus at 7:00 pm CLT. Did you attend HBS? The admissions team also wants to connect with alumni, and will host a separate reception exclusively for alumni before the presentation. You can register for the event here.