Investors are ditching the greenback: The USD fell to three-month lows yesterday, putting it on track for its worst monthly performance in a year, after Federal Reserve Governor Christopher Waller hinted at the possibility of rate cuts in the coming months, the Financial Times wrote. The USD index — which tracks the greenback against a basket of currencies — dipped to its lowest since mid-August yesterday, and has lost 3.6% this month in a sign that financial conditions are easing.

What he said: “I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%, Waller — a hawkish member of the Fed board — said yesterday. If inflation continues to decline for “several more months … we could start lowering the policy rate.”

US treasuries gained ground: Yields on US government debt fell to two-month lows following Waller’s comments. The rate on the 10-year bond slipped further to 4.35%, and has now fallen from above 5% in just five weeks.

A cause for celebration in our neck of the woods: A weakening greenback is good news for countries with USD-denominated debts or for those heavily dependent on imports, like Egypt. A weaker USD makes it cheaper to service USD debt and to pay for imports.

Rain on our parade: Another Fed governor, Michelle Bowman, still believes that further hikes may be in the cards to bring inflation down “in a timely way.” She warned against “prematurely declaring victory in the fight against inflation.”

Could targeting MDBs avail investments for climate action? BlackRock researchers think targeting multilateral development banks (MDBs) could make available as much as USD 4 tn for climate-related investments in emerging markets, according to a paper published yesterday. The multinational investment company suggested MDB reforms to address the climate financing gap, focusing on financing infrastructure investments in emerging markets, and backing initial losses in climate-related projects.

Diversification needed: BlackRock highlighted that climate investment often leans too much towards the US, Europe, and China, leaving major financing gaps in emerging markets. The investment firm said MDBs are pivotal in mobilizing private capital, recommending MDB participation in AAA-rated bond issuance and “puttable green bonds” to mitigate investment risks.

Stop us if this sounds familiar: The BlackRock paper highlights the familiar problem of emerging markets’ struggle to access capital to address climate change, reports Bloomberg.

ALSO WORTH NOTING-

  • Gulf states look ‘very, very attractive’ to Ray Dalio: Bn’aire hedge fund investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates and recent subject of a negative take in a high-profile biography that suggests his secret sauce wasn’t a method, but his whim, emphasized the GCC’s fast-emerging appeal to global investors amid a changing world order. (CNBC)

ADX

9,541

+0.3% (YTD: -6.6%)

DFM

4,009

+0.4% (YTD: +20.2%)

Nasdaq Dubai UAE20

3794.08

-0.8% (YTD: -5.6%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.1% o/n

5.6% 1 yr

TASI

11,100.92

+0.2% (YTD: 5.9%)

EGX30

54,557

-3.03% (YTD: +72.08%)

S&P 500

4,555

+0.1% (YTD: +18.6%)

FTSE 100

7,455

-0.1% (YTD: +0.1%)

Euro Stoxx 50

4,348

-0.2% (YTD: +14.6%)

Brent crude

USD 81.66

+2.1%

Natural gas (Nymex)

USD 2.71

-3.2%

Gold

USD 2,060

+1.3%

BTC

USD 37,979

+2.5% (YTD: +131.2%)

THE CLOSING BELL-

The ADX rose 0.3% yesterday on turnover of AED 127.82 mn. The index is down 6.6% YTD.

In the green: Gulf Cement Company (+5.9%), Emirates Stallions Group (+3.9%) and Dana Gas (+2.4%).

In the red: Foodco (-5.7%), Bildco (-2.1%) and Americana Restaurants (-2.9%).

It is looking like another mixed session for Asian markets in early trading this morning with indices split between gains and losses. Futures suggest a mixed open in Europe later this morning, while major US benchmarks are likely to rise at the opening bell.

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