Markets: Most global equity markets ended positive week – optimism picked up as US revealed plans to give China more time to avoid a tariff hike (further, on Fri, Trump tweeted that tariffs on Mexican imports were “indefinitely suspended) while weak jobs data raised expectations for a Fed rate cut. Yields on 10-year Treasury notes hit their lowest since Sep 2017. Regional markets were mostly closed for Eid holidays. The dollar index retreated against most currencies. Oil prices recovered towards end of the week from the 5-month lows touched earlier; WTI dropped more than 20% from its Apr high this week. Gold prices touched a 14-month high on rate cut expectations.
Global Developments Bottomline: Trade wars and tariff threats continue to take center stage at the G20 meetings (will the G20 communique show a united front?), and the world is bracing for slower economic growth if not recession. This is supported by the latest round of PMI data: the news is not very promising as the surveys signal the weakest global economic growth since June 2016. Amidst the dovish rhetoric across global central banks last week came hopes of a Fed rate cut on the heels of labour market sluggishness.
- Bahrain’s foreign exchange reserves increased to BHD 1.1059bn as of Q1 this year, more than double BHD 530.7mn at end-2018. Loans provided by retail banks were up by 7.1% (from end-2018) to BHD 8.99bn.
- Bahrain plans to allow foreign companies to own 100% of oil and natural gas extraction projects; however, to be eligible, the foreign company must have signed (or be in the final stages of signing) an exploration and production agreement with the government.
- Bahrain will issue a new law to “organize the business of SMEs” this year, according to the chairman of the Bahrain SME Development Society.
- Tourists into Bahrain increased by 3.1% yoy to 3.2mn visitors in Q1 this year. Tourists spent approximately 4.1mln nights in total, making it an average of 3.3 nights per tourist.
- Egypt’s foreign reserves surged by 13.6% yoy to USD 44.275bn in May, according to the central bank.
- Total foreign currency deposits at Egypt’s banks increased by 6.3% yoy to EGP 741.759bn (USD 12.419bn) at end-Apr.
- Egypt plans to auction USD 715mn worth of one-year dollar-denominated treasury bills on Jun 10th.
- Iraq’s oil minister affirmed his support for the rollover of the current OPEC+ deal to curb oil output, given its partial effectiveness in reducing oil inventories and help in stabilizing the market.
- Bank deposits in Kuwait increased by 1.33% yoy to KWD 43.34 (USD 142.86bn) in Apr, supported by a 4.1% rise in private sector deposits
- Lebanon’s PMI remained weak in May, falling to 46.3 from Apr’s 46.7, as new orders continued to decline. Confidence levels touched a 10-month low, with no panel members expecting an increase in output and 26% predicting a contraction.
- Lebanon’s draft plan to tackle the issue of undocumented foreign labour has been sent to the Cabinet’s secretariat. Currently, only 1,733 Syrian nationals were in possession of a legal work permit, whereas some 939,00 refugees are registered with the UN.
- Bank credit extended by Oman’s banking sector grew by 5.7% yoy to OMR 25.5bn as of end-Mar this year. Credit to the private sector was up 4.2% to OMR 22.4bn, of which the share of the non-financial corporate sector was 46.1%.
- Oman’s new USD 1bn power plant Sohar-3, which generates 1710 MW, started commercial operations.
- Oman’s government extended the expat visa ban (first introduced in Jan 2018) for a further six months in certain professions and industries, reported the Times of Oman.
- Saudi Arabia further reduced its oil output in May: sources told Reuters that thecountry pumped 9.65mn barrels of oil per day versus the agreement of 10.3mn bpd.
- Unemployment rate in Saudi Arabia dropped to 12.5% in Q1 this year versus 12.7% in the previous quarter. Female unemployment stands high at 31.7% (vs. male unemployment rate of 6.6%)
- Saudi Arabia and Russia’s energy ministers are expected to meet on Jun 10th to discuss economic cooperation as well as joint projects in energy and agriculture. Separately, Russia’s sovereign wealth fund plans to invest more than USD 2bn in Saudi Arabia this year.
- UAE’s inflation touched a 4-month low of 2.1% yoy in Apr, driven down by a 5.08% yoy decline in housing and utilities prices and a 4.99% decline in prices of clothing and footwear.
- Credit-risk premium in Dubai has fallen by 42.5% to 118.2bps as of end-2018 from 205.8bps at end-2015, according to the UAE central bank.
- Real estate transactions in Dubai exceed AED 34bn (USD 9.3bn) in Jan-May (+33% yoy).
- Expat remittances from the UAE touched AED 1.5trn between 2009-2018, according to the UAE central bank. Remittances increased by 4% or AED 150bn a year and in 2018, remittances accounted for 11.1% of UAE’s GDP.
- Japan imported 21.564mn barrels of crude oil from UAE in Apr 2019, accounting for 23.7% of Japan’s total crude oil imports.