THIS MORNING: Shoukry in US for high-level talks; Iraq PM survives assassination attempt; Ethiopia rebels gain ground; US passes huge infrastructure bill.
Good morning, wonderful people, and happy Sunday. Our guts tell us it’s going to be a big week for business and investment news, but you can expect the next few days to be dominated by talk of our strategic relationship with the United States. Cairo and Washington are kicking off a two-day strategic dialogue in DC, and we have chapter and verse on what you can likely expect, below.
Washington also dominates global business headlines at the start of this workweek:
THE BIG STORY ABROAD- US Democrats passed a USD 1.2 tn infrastructure bill late on Friday in a major victory for US President Joe Biden after months of infighting over the bill among Democratic factions. The legislation will see the biggest upgrade of America’s roads, bridges, railways and internet infrastructure in more than a decade. It comes on the back of a USD 1.9 tn covid stimulus package back in March.
But lawmakers delayed a vote on the larger Build Back Better Act until later this month after several moderate Democrats refused to lend their votes until it had been independently costed. The bill would inject USD 1.75 tn into education and healthcare services, as well as more than USD 550 bn into green projects. Events on the Hill got plenty of ink from the global press. (Financial Times | Reuters | New York Times | Washington Post).
The civil war in Ethiopia is getting a lot of play in the global press as Tigrayan rebels advance on the nation’s capital. Rebels are reportedly within 200 miles of Addis Ababa and will be aided further after a coalition of opposition factions formed an alliance to bring down Abiy Ahmed’s government. (Reuters | Washington Post | CNN | Associated Press | The Guardian)
Someone tried (and failed) to assassinate the Iraqi PM in the early hours of this morning: Prime Minister Moustafa Al Kadhimi was targeted with a drone loaded with explosives which flew towards his house in Baghdad’s Green Zone early this morning, Bloomberg reports. Al Kadhimi tweeted that he was safe and called for calm.
SIGN OF THE TIMES- US stocks are crushing the rest of the world’s equities in a way that we’ve never seen before, CNBC host Carl Quintanilla notes on his Twitter feed (he’s a great follow). US shares account for 80% of the world’s gain in market cap so far this year. Quintanilla was tweeting as traders pushed US shares to a new record high last week.
Really left behind? Emerging market shares, as we note in this morning’s Planet Finance (below).
WHAT’S HAPPENING TODAY-
PSA #1- Time changed in Canada and the United States as clocks in most (but not all) provinces and states “fell back” an hour with the end of daylight saving time. Egypt did away with the twice-annual change of the clocks a few years back after a ridiculous year in which we sprang forward, fell back for Ramadan, sprang forward again just in time for Eid, and then “fell back” in fall. Clocks changed in Ireland and the United Kingdom last Sunday.
PSA #2- All non-citizen, non-immigrant travelers to the US of A need to show proof of vaccination to board flights starting today. Fully-vaccinated travellers will still need to show a negative PCR test taken within 72 hours of departure and provide evidence of vaccination (this can be a QR code, a physical vaccination certificate or a digital copy of a certificate), the US embassy said Thursday. The US is now accepting Sinopharm and Sinovac vaccines (but still no Sputnik).
PSA #3- You have 10 more days to catch Art d’Egypte’s stunning Forever is Now exhibit at the Pyramids after the organizers extended its run. The site is open from 9am until 4pm daily, and all you need for admission is a ticket to enter the Pyramids. Catch some of the coolest public art we’ve seen in a long time on IG (watch, runtime: 1:33).
PSA #4- The fourth season of Stranger Things will make its debut in summer 2022, Netflix said yesterday at the end of the “titles teaser” (watch, runtime: 0:53) it released to drum up hype for the popular show on “Stranger Things Day.” The streamer also released yesterday the fourth of what pundits think are four short teasers before the drop of a “big” trailer. This one is titled “Welcome to California” and promises an action-packed season (watch, runtime: 1:13).
Shoukry in US for high-level talks tomorrow: Foreign Minister Sameh Shoukry will hold talks with US Secretary of State Antony Blinken during the two-day US-Egypt Strategic Dialogue, which kicks off tomorrow, the Egyptian Foreign Ministry and the US State Department said in separate statements over the weekend. The meetings, which will also be attended by senior officials from USAID and the Department of Defense, will cover “international, regional, human rights and bilateral cooperation on economic, judicial, security, educational and cultural issues,” the State Department said.
The meeting comes as relations continue to improve: After initially getting the cold shoulder from the Biden administration, Cairo earned credit for its work on the Israel-Palestine file and relations continue to improve. The US has gifted us mns of doses of mRNA covid-19 vaccines (8.25 mn jabs had arrived as of 30 October) and USAID recently unveiled some USD 125 mn in grants to fund projects in critical sectors including health and education. The State Department notice of the meeting described Egypt as “a vital partner for the United States.”
Here’s what we expect to be focusing minds over the two days:
#1- GERD: Persuading the US to become more actively involved in the intractable dispute with Ethiopia over its hydropower dam will be at or near Cairo’s top priority in the talks. The Sisi administration has been lobbying Washington for years on the issue, and though it had some limited success courting the Trump administration, the Biden White House has been more reluctant to take sides, refusing to co-sign the resolution Egypt brought to the UN Security Council earlier this year that called for international pressure on Addis Ababa. Progress here will be complicated given Tigrayan rebels’ march on Addis Ababa (above).
#2- Human rights: The Biden administration has put substantial importance on Egypt improving its rights record, including a decision to withhold a small amount of military aid until Cairo meets several conditions relating to its treatment of civil society workers and journalists. Egypt has wanted to show Washington that it is taking steps in this direction, dropping charges against several NGOs in the long-running foreign funding case and announcing a new human rights strategy. It has also lifted the state of emergency for the first time since 2017, though the effects of this remain uncertain after the House passed last week a raft of legislative amendments relating to national security.
#3- Israel-Palestine: Egypt has positioned itself as a vital partner for the US regarding Israel-Palestine issues, and demonstrated its value when it successfully mediated the ceasefire between Hamas and Tel Aviv that ended the 11-day war in May. The US and Egypt are working together to mediate Palestinian reconcilation talks, Cairo has recently hosted Jordanian and Palestinian leaders to discuss ways to restart peace negotiations, and in September Israeli PM Naftali Bennett became the first Israeli leader in a decade to make an official visit to Egypt.
#4- Sudan: Washington will want to get Egypt on the same page regarding the Sudanese military’s seizure of power in Khartoum last month, an act that threatens the democratic transition to a civilian administration in our southern neighbour. Though the US has been strong in its condemnation of the coup, Egypt has been less so, and has maintained close ties with military leader Abdel Fattah El Burhan, who according to the Wall Street Journal travelled to Cairo for talks the day before he seized power.
Less clear to us: What the two sides will discuss on the economic side of the ledger.
LATER THIS WEEK-
Inflation: Inflation figures for October will be released this Wednesday, 10 November;
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
THE LATEST IN THE ENERGY CRISIS- OPEC+ shrugs amid global energy crunch: The group of oil-exporting nations stuck to its plan of gradually increasing output by 400k bbl/d at its meeting on Thursday, ignoring calls by US president Joe Biden for the group to increase supply faster to ease soaring energy prices, Bloomberg reports. The Saudi and Russia-led cartel insisted that energy price hikes are the result of triple-digit spikes in the supply of gas and coal, and that producers do not need to act to hold down oil prices. “Oil is not the problem,” Saudi Energy Minister Prince Abdulaziz bin Salman told reporters. “The problem is the energy complex is going through havoc and hell.”
Saudi Aramco sharply upped the selling price of its crude to all buyers a day after the OPEC+ announcement.
The UK is turning to Qatar to plug its gas shortfall: UK officials have been in discussions with Qatar over a pact to make the Gulf state its “supplier of last resort” for liquefied natural gas, which would ensure the country can access gas even if supplies tighten, the Financial Times reports, citing informed sources.
Meanwhile, the wheat trade is on track for a record season despite soaring prices, amid high demand coming from the Middle East, according to Bloomberg. Egypt, as the world’s largest importer, is responsible for some of the boom, with authorities replenishing the country’s wheat supplies through recent tenders. Iraq, Iran, Turkey and Afghanistan are also piling in, after drought hit their harvests earlier this year. Iran is now Russia’s top wheat importer so far into the season, overtaking Egypt.