BMI sees US tariffs having a limited effect on the MENA region: Fitch Solutions’ research unit BMI sees MENA countries (and GCC countries in particular) being safe from direct tariffs from the Trump administration due to “economic and strategic considerations,” it said in its MENA Monthly Outlook Report (pdf). While exports from the region will not be significantly affected, there could be an impact on oil prices and inflation, with more debt-ridden emerging markets set to feel the brunt of the impacts.

Tariffs on the UAE and Saudi Arabia would be “counterproductive”: The report argues that the two countries’ investments in the US — specifically in AI — along with close relations with US President Donald Trump would make tariffs on both countries “counterproductive,” especially as Trump looks to “expand the Abraham Accords and reduce China's influence in the Middle East,” the report reads.

The impact on the oil market: “The macro outlook for MENA (Middle East and North Africa) is set to be weighed down by global tariff uncertainty indirectly through oil prices, to the extent that tariff and macro uncertainties continue to be a drag to Brent oil prices,” Standard Chartered MENA Economist Carla Slim told CNBC. While tariffs could drive up the price of oil in the short term, providing a boost to oil-exporting economies, a resulting slowdown in global trade could offset tangible benefits, especially for countries like the UAE that are looking to establish themselves as logistics hubs.

Interest rates to stay higher for longer: A move from the US Federal Reserve to keep monetary policy tight for the remainder of the year would represent a “dilemma” for policymakers in the GCC, “especially as the inflationary environment is benign” — but it would also create “head-winds for the non-oil economy” in Gulf countries, according to the report. Tighter monetary policies could trigger a downturn in private sector investment and growth for economies like Saudi Arabia and the UAE, S&P Global said earlier.

Countries with high foreign debt, like Egypt, Jordan, and Lebanon, are at particular economic risk, CNBC said, as the cost of servicing this external debt could rise on the back of a higher valued greenback.

MARKETS THIS MORNING-

Asian markets are mostly on the rise, though China’s CSI 300 is flat after China announced it would boost people’s income in a bid to revive consumption. Japan’s Nikkei and South Korea’s Kospi are both up by more than 1%.

Wall Street futures signal another disappointing open, after a brutal week that saw sell-offs wipe bns of USD in value of US stocks, and sent the S&P 500 into correction territory.

TASI

11,854

+1.1% (YTD: -1.5%)

MSCI Tadawul 30

1,495

+1.1% (YTD: -1.0%)

NomuC

31,275

+0.5% (YTD: -0.6%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

31,338

+0.2% (YTD: +5.4%)

ADX

9,419

+0.1% (YTD: 0.0%)

DFM

5,141

-0.9% (YTD: -0.4%)

S&P 500

5,639

+2.1% (YTD: -4.1%)

FTSE 100

8,632

+1.1% (YTD: +5.6%)

Euro Stoxx 50

5,404

+1.4% (YTD: +10.4%)

Brent crude

USD 70.58

+1.0%

Natural gas (Nymex)

USD 4.10

-0.2%

Gold

USD 3,001.10

+0.3%

BTC

USD 82,102

-2.7% (YTD: -12.2%)

THE CLOSING BELL: TADAWUL-

The TASI rose 1.1% yesterday on turnover of SAR 4.7 bn. The index is down 1.5% YTD.

In the green: ARDCO (+9.9%), SRMG (+8.0%) and Banan (+6.3%).

In the red: SPM (-3.6%), AlBaha (-2.6%) and Taprco (-1.8%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.5% yesterday on turnover of SAR 27.6 mn. The index is down 0.6% YTD.

In the green: Miral (+17.4%), Knowledgenet (+10.0%) and Mulkia (+9.7%).

In the red: Pan Gulf (-9.3%), Drc (-7.6%) And Amwaj International (-7.7%).

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