Gulf Markets Climb on Rising US Rate Cut Expectations

Gulf Markets Climb on Rising US Rate Cut Expectations

On Thursday, major Gulf stock markets surged in response to weak US labour market data, which has boosted investor expectations of an interest rate reduction later this year. The number of unemployment claims went up to 238,000 on Wednesday, which is a sign that the US job market is getting weaker.

This means that the Federal Reserve may start lowering interest rates in September. Before the data, there was a 65% likelihood of a September rate decrease; now, the markets are pricing in a 47 basis point rate cut this year. The Fed usually sets monetary policy for GCC because the majority of the region’s currencies are fixed against the US dollar.

Al Taiseer Group and ACWA Power Co. increased by 1.6% and 0.2%, respectively, to help the Saudi Arabian benchmark index stop four sessions of losses. Oil giant Saudi Aramco saw a 0.5% increase despite a declining world oil market.

Dubai Electricity and Water Authority increased by 1.2%, while the main share index in Dubai increased by 0.1%. With Qatar National Bank up 0.5%, Qatar’s benchmark increased by 0.2%. However, a 1.4% decline in ETG caused Abu Dhabi’s benchmark index to decline by 0.2%.