Emerging-market currencies slump amid Middle East tensions and speculations over rate cuts: Emerging-market currencies tumbled on Thursday as escalating tensions in the Middle East drove demand for safer assets like the USD, Bloomberg reports. Adding to the strain, new data revealed that the US services sector expanded at its fastest pace since early 2023, raising expectations that the Federal Reserve may slow its rate cuts. Plus: President Joe Biden’s implication that Israel may hit Iranian oil infrastructure further unsettled markets.

The MSCI index tracking emerging-market currencies fell by 0.5% yesterday before paring losses. The key gauge for developing countries’ stocks also fell 1.3% as Hong Kong stocks fell after a two-week streak stimulated by a package of measures aimed at reviving the Chinese economy.

The risk: a slower pace of Fed rate cuts means slower rate cuts in EMs, and in turn, a harder time for EM currencies. US Federal Reserve Chair Jerome Powell already signaled recently that the Fed is in no hurry to cut rates.

On the bright side, both HSBC and Morgan Stanley expressed a positive outlook for China's equities, with predictions of further gains. That is set to boost EM currencies, which have already been benefitting from a removal of downside risk in China’s economy, one portfolio manager said.

US labor data in focus: US labor market data expected tomorrow could provide more insight into the Fed's upcoming rate cut trajectory.

TASI

11,958

-0.7% (YTD: -0.1%)

MSCI Tadawul 30

1,497

-0.7% (YTD: -3.5%)

NomuC

24,915

-0.2% (YTD: +1.6%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.5% repo

5.0% reverse repo

EGX30

31,721

+1.2% (YTD: +27.4%)

ADX

9,180

-0.4% (YTD:-4.2%)

DFM

4,406

+0.2% (YTD: +8.5%)

S&P 500

5,751

+0.9% (YTD: +20.6%)

FTSE 100

8,281

0.0% (YTD: +7.2%)

Euro Stoxx 50

4,955

+0.7% (YTD: +9.6%)

Brent crude

USD 78.05

+0.6%

Natural gas (Nymex)

USD 2.85

-3.9%

Gold

USD 2,667.80

-0.4%

BTC

USD 62,205.40

+1.8% (YTD: +40.8%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.7% on Thursday on turnover of SAR 7.2 bn. The index is down 0.1% YTD.

In the green: Kingdom (+9.9%), Anaam Holding (+8.6%) and Al Baha (+7.7%).

In the red: Retal (-6.0%), Sfico (-5.8%) and Alistithmar REIT (-5.0%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.2% on Thursday on turnover of SAR 21.8 mn. The index is up 1.6% YTD.

In the green: Knowledge Tower (+5.4%), Tibbiyah (+4.3%) and Aldawliah (+3.9%).

In the red: Apico (-10.0%), Edarat (-6.4%) and WSM (-6.3%)

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