Most stock markets in the Gulf rebounded on Tuesday as comments from the Federal Reserve officials soothed investor nerves, following the previous session’s global sell-off on fears of a possible U.S. recession.
San Francisco Federal Reserve Bank President Mary Daly on Monday said it is too soon to know if the July jobs report signals a slowdown or real weakness, but it is “extremely important” for the central bank to prevent the labour market from tipping into a downturn.
Market expectations that the Fed would cut interest rates by 50 basis points at its September meeting remained intact, with futures implying a 71% chance of such an outsized move.
The market has around 100 basis points of easing priced in for this year, and a similar amount for 2025.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed’s decisions as most regional currencies are pegged to the U.S. dollar.
Source – Reuters
