Most Gulf markets closed higher on Sunday, extending gains from the previous session after data supported the likelihood of interest rate cuts by the US Federal Reserve.
The U.S. personal consumption expenditures (PCE) price index – the Fed’s preferred measure of inflation – rose 0.2 percent in July, according to Commerce Department data released Friday.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5 percent last month, the report said. The data set the stage for the Fed to likely begin easing monetary policy this month.
Money markets are pricing in the Fed’s first 25 basis point (bp) cut of this cycle at its September meeting, with a 33 percent chance of a 50 bp reduction.
Monetary policy in the six members of the Gulf Cooperation Council (GCC), including Saudi Arabia, is generally guided by decisions of the Federal Reserve, as most regional currencies are pegged to the US dollar.
Saudi Arabia’s benchmark index <.TASI> gained 0.4 percent, with aluminum products maker Al Taiseer Group <4143.SE> advancing 3.1 percent and Al Rajhi Bank <1120.SE> closing with a rise of 0.8 percent.
In Qatar, the index <.QSI> rose 0.3 percent, and Islamic lender Masraf Al Rayan
Outside the Gulf, Egypt’s blue chip index <.EGX30> rose 0.4 percent, led by a 1.7 percent increase in Talaat Mostafa Group
Egypt’s net foreign assets pink by $220 million in July, remaining positive for a third consecutive month after being deeply negative for more than two years, central bank data showed.
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