The end of the GCC dispute is a “positive” development for the region; National Bank of Kuwait said and noted the “economic impact of this reconciliation could be limited” but still would translate into more trade and people’s movement across borders.
After three and a half years of severed relations, a reconciliation between Qatar and its neighbours was agreed in the recent GCC summit in Saudi Arabia, NBK said.
In its ‘Weekly Economic and Markets Review’, NBK said GCC stocks tracked their global peers higher, lifted by surging oil prices following Saudi Arabia’s decision to cut its oil production. Sentiment was also helped by the Saudi-Qatar reconciliation, ending a three-year rift.
Oil prices surged to 11-month highs, with Brent rallying to $55.99/b (+8.1% mtd) by Friday’s close on US stimulus and vaccine rollout hopes, but the rally’s major catalyst was Tuesday’s Opec+ announcement that Saudi Arabia would unilaterally cut its production by 1mn bpd in February and March.
A larger than expected decline in US crude stocks (-8mn barrels to 485.5mn barrels) also helped stoke bullish sentiment.
Global equity markets rallied on hopes of additional US stimulus, despite civil unrest in the US capital.
In its key takeaways, NBK said the Saudi oil production cut was framed as a pre-emptive move to head off any oil demand weakness in the first quarter of 2021. It is well-judged in light of the return to mobility restrictions in major economies.
The Saudi non-oil economy ended 2020 on a strong footing. This is due to the success in controlling the virus, quick and well-targeted stimulus measures and the country’s more vibrant and diversified non-oil sector, NBK said.
Global equity markets rallied on hopes of additional US stimulus, despite civil unrest in the US capital.
The MSCI AC World index rose 2.7% week-on-week, led by emerging markets (5.1%), while the Euro Stoxx 50 gained a solid 2.6%.
US stock reached all-time highs with the S&P500 up 1.8% week-on-week. The 10- year treasury yield surged 20 bps week-on-week to 1.11%, the highest since March amid improved market confidence.
In its ‘Weekly Economic and Markets Review’, NBK said GCC stocks tracked their global peers higher, lifted by surging oil prices following Saudi Arabia’s decision to cut its oil production. Sentiment was also helped by the Saudi-Qatar reconciliation, ending a three-year rift.
Oil prices surged to 11-month highs, with Brent rallying to $55.99/b (+8.1% mtd) by Friday’s close on US stimulus and vaccine rollout hopes, but the rally’s major catalyst was Tuesday’s Opec+ announcement that Saudi Arabia would unilaterally cut its production by 1mn bpd in February and March.
A larger than expected decline in US crude stocks (-8mn barrels to 485.5mn barrels) also helped stoke bullish sentiment.
Global equity markets rallied on hopes of additional US stimulus, despite civil unrest in the US capital.
In its key takeaways, NBK said the Saudi oil production cut was framed as a pre-emptive move to head off any oil demand weakness in the first quarter of 2021. It is well-judged in light of the return to mobility restrictions in major economies.
The Saudi non-oil economy ended 2020 on a strong footing. This is due to the success in controlling the virus, quick and well-targeted stimulus measures and the country’s more vibrant and diversified non-oil sector, NBK said.
Global equity markets rallied on hopes of additional US stimulus, despite civil unrest in the US capital.
The MSCI AC World index rose 2.7% week-on-week, led by emerging markets (5.1%), while the Euro Stoxx 50 gained a solid 2.6%.
US stock reached all-time highs with the S&P500 up 1.8% week-on-week. The 10- year treasury yield surged 20 bps week-on-week to 1.11%, the highest since March amid improved market confidence.
