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Wednesday, 6 November 2019

What we’re tracking on 6 November 2019

We could inadvertently end up with a sixth legislative cycle in a five-year parliamentary term. Why? Our illustrious members of parliament set the legislative cycle to run between October and June every year, quite forgetting that their five-year parliamentary term will end in January 2021. The House Legislative Committee is now looking into whether a sixth, curtailed legislative session will be needed to bridge the gap between June 2020 and January 2021. Al Masry Al Youm has the story.

GERD talks get underway in Washington today: Foreign Minister Sameh Shoukry is in Washington D.C. today for talks with his Ethiopian and Sudanese counterparts aimed at breaking the deadlock on Grand Ethiopian Renaissance Dam (GERD) negotiations. President Donald Trump invited the three countries to the US capital two weeks ago as temperatures rose between Egypt and Ethiopia. It’s still not clear precisely what the US role is in the situation: Ethiopia has refused to accept the US as a mediator and said that today’s meeting will feature discussions only. Meanwhile, technical talks are due to resume in the coming weeks following President Abdel Fattah El Sisi and Ethiopian PM Abiy Ahmed’s agreement at the Russia-Africa summit. The National has more background on the talks.

Trump has chosen US Treasury Secretary Steve Mnuchin to lead the meeting, instead of letting the State Department take the reins, which has been discussing the issue with the parties since at least 2011, Voice of America says.

We also know that World Bank President David Malpass will be present during the talks. Law professor Ayman Salama tells Ahram Online that the World Bank is the “most competent” international authority to lead mediation efforts given that it has studied the economic, social and environmental effects of dams built on transboundary rivers.

Shoukry thanked the US for its efforts to solve the dispute during talks with Trump advisor Jared Kushner yesterday, a cabinet statement said. They also discussed the situation in Palestine, and Turkey’s invasion of northern Syria.

Today is the last day of the Arab Sustainable Development Week, which has been running all week in our fair city.

Key dates on which to keep your eye:

  • Sunday, 10 November is inflation day, with the CBE and state statistics agency CAPMAS releasing figures for headline and core inflation;
  • Thursday, 14 November is interest rate day, when the CBE’s Monetary Policy Committee meets to seat interest rates. The committee has cut rates at its last two meetings.

Uber books third-largest loss in 3Q, insists it is on the way to profitability: Ride hailing giant Uber is optimistic it will turn a profit in 2021 despite posting a series of bn-USD quarterly losses, according to the Wall Street Journal. CEO Dara Khosrowshahi said Uber projects its full-year EBITDA to be in the green within two years despite recording a USD 1.2 bn loss in 3Q2019. Shares promptly dived almost 10% to hit a new record low of USD 28.01, MarketWatch says.

OPEC predicts that demand for its oil will decrease by roughly 7% over the next four years, with the market being flooded with supplies of US shale, Bloomberg reports. Demand could reach as little as 32.7 mn bbl/d in 2023, OPEC said in its annual report. By contrast, US shale output could climb by over 40% to reach 17 mn bbl/d — or a fifth of global daily output at that time, it predicts.

Trump administration mulls China tariff concessions: The US is considering removing some tariffs on Chinese goods in a bid to freeze hostilities and agree an initial trade pact, five sources familiar with the talks told the Financial Times. In order to reach an agreement, the White House would reportedly lift the 15% tariffs on USD 112 bn of Chinese goods (such as clothes, appliances and flatscreen TVs). The RMB strengthened past RMB 7 per USD for the first time since August on the news.

Moody’s downgrades Lebanon as economic crisis intensifies: Moody’s cut Lebanon’s credit rating yesterday to Caa2 with a negative outlook, reflecting the increasing risks that the government may default on its debt, Bloomberg says. Widespread protests and political paralysis make it likely that the government will fail to pass a budget in 2020 and push ahead with emergency economic reforms, Moody’s analyst Elisa Parisi-Capone said. Lebanese bonds plummeted 4.8% after the decision, making them the worst-performing sovereigns in the EM space.

Another nail in the coffin of the Iran nuclear agreement: Iranian President Hassan Rouhani has announced that the country will begin supplying centrifuges with uranium gas, effectively restarting its nuclear enrichment program, the Associated Press reports.

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