IGA Capital Weekly Markets Update

For the week beginning October 6, 2025, markets experienced strong growth in global equities, supported by continued market consensus for future Federal Reserve rate cuts. Locally, the stability of both the UAE’s and the Eurozone’s benchmark lending rates provides a solid foundation for debt financing in the high growth Real Estate Market in Dubai, and UAE at large.

Market Overview

U.S. equity markets saw significant gains. The S&P 500 closed at 6,716, rising 2.9% over the last month. The Dow Jones reached 46,758.3, up 2.4% over the same period. The Nasdaq jumped 4.2% over the last month, finishing at 22,781.

The Fed Funds Effective Rate is currently at 4.09%. Market probability for the rate to remain in the 3.75%-4.00% range for the upcoming October 29, 2025 FOMC meeting increased to 94.6%. The market's implied policy rate is projected to fall to 3.10% by September 2026, lower than the Fed Dot Plot median projection of 3.375%.

Fixed Income and Sovereign Yields

The 10-year U.S. Treasury yield is currently at 4.15%, reflecting a slight increase of 7 basis points (bps) over the last month. The long-end of the curve remains steep, with the 2s/10s Treasury spread at 0.57% and the 5s/30s spread at 1.03% as of October 6, 2025.

Globally, 10-year sovereign bond yields as of October 6, 2025, were: Canada at 3.18% (-8 bps 1M), Germany at 2.71% (+5 bps 1M), Japan at 1.65% (+9 bps 1M), and Australia at 4.33% (-1 bps 1M).

Debt Rates

The current lending landscape in the US market continues to pivot on the Secured Overnight Financing Rate (SOFR), which is the benchmark for nearly all new US Dollar-denominated debt. The market currently tracks both the simple overnight SOFR rate and compounded averages for term pricing. As of the most recent data on October 8, 2025, the rolling 30-Day Average SOFR was 4.25207%, and the 90-Day Average SOFR stood at 4.33437%. These averages reflect the cumulative impact of the Federal Reserve’s previous rate cuts in 2025. For forward-looking debt products, the 1-month Term SOFR rate as of October 6, 2025, was 4.08824%, while the 3-month Term SOFR was 3.93708%. This term pricing, which is lower than the rolling averages, indicates that the market expects future SOFR rates to continue easing, consistent with the Federal Reserve’s recent decision to cut the Fed Funds rate to a target range of 4.00%-4.25% in September 2025.

UAE Interbank Offered Rate (EIBOR): EIBOR shows stability, which is vital for regional debt markets. As of October 8, 2025, the 3-Month EIBOR rate was 3.982080%, and the 1-Month EIBOR rate was 4.138100%.

Euro Interbank Offered Rate (EURIBOR): EURIBOR pricing remains relatively low, indicating manageable short-term funding costs in the Eurozone. As of October 7, 2025, the 3-Month EURIBOR rate was 2.029%, and the 1-Month rate was 1.897%.

Commodities & Digital Assets:

• The gold market continued its surge, climbing to $3,942.85 (+11.2% 1M).

• Silver followed suit, reaching $48.67 (+19.8% 1M).

• Oil prices decreased slightly, standing at $61.84 (-1.6% 1M).

• Digital asset sentiment is bullish, driven by institutional interest and safe-haven demand amidst global market fluctuations. As of today, October 9, 2025, Bitcoin (BTC) is trading near $121,890, closely approaching its recent all-time high. Market capitalization for the sector continues to grow.

Inflation and Economic Data

Key U.S. inflation figures show the annualized Headline CPI is 2.90% as of August 2025, having increased by 0.20% from the previous month. Core CPI remains anchored at 3.10%. The U.S. Gross Domestic Product (YoY) is 2.10%, and the unemployment rate is 4.30%.

IGA Capital Perspective

The first week of October confirmed the market's conviction in a decelerating rate environment, evidenced by the sharp drop in the Fed Funds Effective Rate and the strong market consensus for a lower policy rate. The local EIBOR's stability is vital for regional lending and business confidence. The explosive performance of precious metals and the continued bullish momentum in the digital asset sector, including Bitcoin trading at high levels, underscore a global demand for non-fiat assets, reflecting both strong liquidity and geopolitical uncertainty.

Footnotes and Disclosures:

• Source: Bloomberg

• Sources: Walker & Dunlop

• Data on Fed Funds Rate Target Probabilities: CME Group

• EIBOR Data (October 7, 2025): Central Bank of the UAE

• EIBOR Data (October 8, 2025): Mortgage Broker/Financial News

• Bitcoin Price (October 9, 2025): Real-time Crypto Exchange Data

• General Market Context: DIFC News, The Economic Times

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