Headline inflation in Egypt accelerated to its fastest pace since mid-2017 last month and, while there are tentative signs that it could be near its peak, the risk of another devaluation would push it up again. Elsewhere, Tunisia’s president lashed out at the IMF, further dashing hopes that a much-needed deal can be reached. This further reinforces our view that a messy collapse in the currency and sovereign default lie in store. And finally, peace talks between Saudi Arabia and Houthis in Yemen provide hope that the conflict may be nearing an end, which could go some way to reducing any risk premia in local financial markets and oil prices.
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