The IMF is sounding the alarm on a potential oil-led inflation spike, with the Fund's Managing Director Kristalina Georgieva warning on Monday that a sustained 10% increase in oil prices throughout the year would result in a 40 bps rise in global inflation, Reuters reports. “We are seeing resilience tested again by the new conflict in the Middle East,” Georgieva said, urging policymakers to “think of the unthinkable and prepare for it.”

Oxford Economics also sees global inflation rising by 0.3-0.4% in 4Q 2026, accompanied by a 0.1 percentage point dip in global growth. While energy price trajectories remain volatile, Oxford Economics anticipates that Brent crude will average USD 79 / bbl in 2Q 2026 — a USD 15 upward revision from February estimates — before potentially retreating as supply conditions normalize, according to a report seen by EnterpriseAM.

The most exposed regions: The UK and the Eurozone, due to their exposure to gas prices. The agency sees rising energy prices pushing UK inflation up by 0.5 percentage points in 4Q compared to previous forecasts.

What’s the prognosis on rate cuts? The Bank of England will likely avoid cutting interest rates at its March meeting — or beyond if energy prices remain elevated for long — though rate cuts could resume in April or June if energy prices retreat quickly. In the Eurozone, the European Central Bank (ECB) is expected to maintain interest rates at 2% throughout the year. The ECB might raise rates by 25-50 bps if the energy shock persists.

As for the US Federal Reserve, Oxford Economics’ forecasts remain unchanged, pointing toward potential interest rate cuts of 25 bps in June and September, given the energy shock is less likely to impact inflation.

MARKETS THIS MORNING-

It’s another morning with Asia-Pacific markets opening in the green as oil prices dipped further on hopes that the International Energy Agency will release its largest-ever stock to keep prices under control. The Kopsi is leading gains, up 3.4%, with the Nikkei trailing behind.

TASI

10,930

+0.9% (YTD: +4.2%)

MSCI Tadawul 30

1,478

+1.0% (YTD: +6.5%)

NomuC

22,281

0.0% (YTD: -4.4%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

4.25% repo

3.75% reverse repo

EGX30

47,773

+2.9% (YTD: +14.2%)

ADX

9,997

+1.4% (YTD: 0.0%)

DFM

5,867

+2.0% (YTD: -3.0%)

S&P 500

6,781

-0.2% (YTD: -0.9%)

FTSE 100

10,412

+1.6% (YTD: +4.8%)

Euro Stoxx 50

5,837

+2.7% (YTD: +0.8%)

Brent crude

USD 87.80

-11.3%

Natural gas (Nymex)

USD 3.05

+1.1%

Gold

USD 5,204

-0.7%

BTC

USD 70,056

+1.3% (YTD: -20.1%)

Sukuk/bond market index

917.68

-0.2% (YTD: -0.2%)

S&P MENA Bond & Sukuk

151.48

-0.2% (YTD: -0.3%)

VIX (Volatility Index)

24.93

-2.2% (YTD: +66.8%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.9% yesterday on turnover of SAR 5.2 bn. The index is up 4.2% YTD.

In the green: Albabtain (+9.9%), Jazadco (+9.7%), and Alrajhi Takaful (+8.3%).

In the red: Petro Rabigh (-7.4%), Saudi Kayan (-4.8%), and Sipchem (-4.8%).

THE CLOSING BELL: NOMU-

The NomuC remained flat yesterday on turnover of SAR 21.7 mn. The index is down 4.4% YTD.

In the green: Asas Makeen (+10.0%), Paper Home (+9.97%), and Watani Steel (+9.4%).

In the red: Ghida Alsultan (-9.9%), Jamjoon Fashion (-7.5%), and Alqemam (-6.8%).

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