The Fed appeared set to cut interest rates in September after minutes of the U.S. central bank’s July 30-31 meeting showed that a “vast majority” of officials said they expected such a move.
Today will witness the release of other US data, including the Purchasing Managers Index and unemployment claims.
Interest rate futures markets are fully pricing in a 25 basis point cut from the Fed next month, with a third of forecasts suggesting a 50 basis point cut. The forecasts point to an average 222 basis point cut in the US by the end of 2025, compared with 163 basis points in Europe.
Monetary policy in the six GCC countries follows the decisions of the Federal Reserve, as most of their currencies are pegged to the dollar.
Saudi Arabia’s benchmark index rose 0.1 percent, helped by a 1.7 percent gain in Middle East Pharmaceutical Industries (Avalon Pharma).
Dubai’s main stock market index closed up 0.3 percent today, with shares in Emirates NBD, the emirate’s largest bank, rising 2.1 percent.
In Abu Dhabi, the index rose 0.3 percent.
The Qatari index did not change significantly.
Oil prices, a catalyst for Gulf financial markets, steadied after four days of declines due to investor concerns about the outlook for global demand, although a decline in US fuel inventories provided some support.
Outside the Gulf, Egypt’s blue-chip index rose 0.8 percent, with Commercial International Bank up 2.1 percent.
Egypt plans to restore oil and gas production to normal levels by 2025 in cooperation with foreign partners, Prime Minister Mostafa Madbouly said at a press conference today.
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