| 11 March, 2018

Sunday Outlook: Oil, stocks rise on U.S. jobs growth

In the Middle East, Gulf stock markets were mixed on Thursday

Global stock markets rose to the highest levels in two weeks on Friday supported by strong U.S. job growth data, adding the largest number of jobs in more than one and a half years last month.

Wall Street led global stock markets gains, but the U.S. currency remained little changed with a view that the Federal Reserve would not increase its pace of raising interest rates with slow U.S. wage gains. The dollar index fell 0.06 percent, while the euro fell 0.04 percent to $1.2305.

In the Middle East, Gulf stock markets were mixed on Thursday with Saudi rising the most by 1.5 percent, while both Qatar and Dubai dropping by 0.8 percent.

The Saudi index was supported by financial stocks and foreign cash inflows from regional markets, while the Qatari index was dragged down by Doha Bank.

Investors are preparing to be well positioned for a potential emerging market status upgrade of the Saudi market by index compiler FTSE which is expected to take a decision by end of March, and by MSCI which is set to announce a decision on whether to upgrade Saudi stocks in June. In effect, foreign cash is reportedly flowing to the Saudi market from neighbouring markets such as Dubai and Abu Dhabi.

Oil prices rose by around $2 on Friday, supported by hopes that a planned meeting between U.S. President Donald Trump and North Korea’s Kim Jong Un would ease geopolitical risks. Brent crude LCOc1 futures rose to $65.49 a barrel, while West Texas Intermediate (WTI) crude CLc1 futures rose to $62.04 a barrel.

The jobs report “speaks to strong, underlying economic conditions, and growth, which includes increased energy demand,” said John Kilduff, partner at investment manager Again Capital in New York in a Reuters report.

In the commodities markets, gold prices rose on Friday as the U.S. dollar fell against a basket of major currencies, making dollar-priced gold less expensive in other currencies.

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© ZAWYA 2018