( ECES ) Report Monitors Global Market Shifts and Their Impact on Egypt

Financial Markets Between External Fluctuations and Domestic Challenges 

The Egyptian Center for Economic Studies (ECES) has released the 22nd edition of its periodic report, "Financial Markets Snapshot," which provides a comprehensive analytical overview of the most prominent developments in global and emerging financial markets, with a focus on their implications for the Egyptian market 

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The report comes at a critical juncture, as the global economy is witnessing rapid shifts in monetary policies and fluctuations in capital flows, in addition to rising risk levels in many emerging markets. This necessitates that countries, including Egypt, adopt more flexible and proactive policies in dealing with these changes.

 

Global Pressures on Interest Rates and Bond Yields

The report indicates that global markets continue to be affected by the major central banks' tendency to maintain interest rates at high levels for longer than anticipated, amidst persistent inflationary pressures.

This has been reflected in government bond yields in both developed and emerging economies, leading to increased borrowing costs and a decline in investor appetite for high-risk assets.

In this context, bond prices declined in several emerging markets, while the local currencies of some of these markets faced renewed pressure due to the outflow of short-term portfolio investments to safer havens.

 

Declining Capital Flows to Emerging Markets

The report noted a significant decline in foreign capital flows to emerging markets during the last quarter, driven by uncertainty surrounding US monetary policy and volatility in energy and metal prices.

 

It also pointed out that geopolitical shifts in some regions have led to increased caution among international investors, which has impacted stock market indices and financial markets in those countries.

 

Direct Impact on the Egyptian Market

Regarding the local market, the report explained that Egyptian financial markets, like their counterparts in the region, are affected by these global developments, both in terms of foreign investor trends and the cost of external financing.

 

It indicated that movements in US interest rates and investor behavior in global debt instruments have a direct impact on the yields of Egyptian treasury bills and bonds, as well as on the rate of indirect foreign investment flows.

 

The report also addressed the performance of the Egyptian Stock Exchange, explaining that it demonstrated relative resilience despite the volatility in emerging markets, supported by increased trading volumes and strong interest from local investors in certain promising sectors.

 

Recommendations to Enhance the Resilience of the Local Market

The Egyptian Center for Economic Studies concluded its report with a set of recommendations aimed at strengthening the resilience of Egyptian markets against external fluctuations. These include:

 

Diversifying local financing instruments to reduce reliance on short-term external inflows.

 

Enhancing transparency and financial disclosure to increase the confidence of both local and foreign investors.

 

Developing the Egyptian capital market and expanding the base of individual and institutional investors.

 

Improving exchange rate management to achieve a balance between stability and market attractiveness.

 

A Cautious Outlook

The report concluded that the coming period will be characterized by a degree of caution and anticipation, given the tightening of global monetary policies and market volatility. It called for strengthening economic flexibility and adopting precautionary financial strategies that support the stability of the Egyptian economy and protect it from external shocks.

 

🔹 Report Publication: Egyptian Center for Economic Studies – October 2025

 

🔹 Original Title: Financial Markets Snapshot – Issue No. 22

 

🔹 Link to the full report: [Click here to read the original version (PDF)](https://eces.org.eg/wp-content/uploads/2025/10/Financial-Markets-Snapshot-Issue-22.pdf)