US-Iran strikes, bond sales, Xi in Cairo

There are growing signs that the US blockade is squeezing Iran’s economy, but US and Iranian strikes this week highlight the challenge of securing a resolution to the conflict. In the meantime, the Gulf states are adapting to disruption to revenues by issuing more dollar debt. Most are well placed to cope with a temporary loss of revenues, but Saudi Arabia’s rising public debt-to-GDP ratio may lead to a higher fiscal risk premium. Finally, Xi Jinping’s visit to Cairo this week underscores that Egypt is in the midst of a US-China tussle for its geopolitical allegiance.