Riyadh to host World Expo 2030

Riyadh, Saudi Arabia will host the World Expo 2030 after it won 119 votes, well ahead of Busan, South Korea and Rome, Italy. The kingdom said it planned to spend USD 7.8bn on hosting the event, a year after it hosts the 2029 Asian Winter Games in Neom. Saudi Arabia is also expected to be selected to host the 2034 FIFA World Cup.

Private sector credit growth in Saudi Arabia picked up slightly to 9.4% y/y in October from 9.3% in September, running ahead of broad money supply growth which accelerated to 8.8% y/y last month from 8.0% in September. Money supply growth has been driven by time and savings deposits, with FX deposits and demand deposits declining on an annual basis.

US consumer confidence as measured by the Conference Board index rose to 102.0 in November from 99.1 in October, coming in higher than forecast. This was the first rise in the consumer confidence index since July. There was a marked improvement in the expectations component reflecting a still resilient labour market and easing inflation. While inflation and higher interest rates are still worrying consumers, one-year inflation expectations eased slightly and people expect interest rates to decline in the coming year.

Today’s Economic Data and Events

14:00 OECD publishes economic outlook

17:00 Germany CPI (Nov flash) forecast -0.5% m/m and 2.5% y/y

17:30 US Q3 GDP (2^nd estimate) forecast 5.0% q/q annualized.

23:00 Fed Beige Book release

Fixed Income

• US 2y yields fell 16bp overnight to 4.73% after Fed officials struck a more balanced note on the outlook for rates. Cristopher Waller indicated that policy was “well positioned” to get inflation back to target and Michelle Bowman indicated that while more rate hikes may well be needed, this would depend on incoming data. The 10y treasury yield fell 7bp to 4.32%.
• 10y yields were lower across the board in Europe also, with gilts down almost -4bp and bunds down -5bp to 2.49%.   

FX

• The Bloomberg USD index declined -0.4% yesterday, with JPY, GBP, AUD and CAD gaining against the greenback.
• The Kiwi is trading stronger this morning after the RBNZ signaled an increased risk of further rate hikes next year. RBNZ kept rates unchanged at today’s meeting but the MPC’s new forecasts show a higher trajectory for the official cash rate in 2024.     

Equities

• US equities closed higher overnight with the Nasdaq Composite gaining 0.3% and the S&P500 up 0.1%. European indices were mixed with the CAD40 and FTSE100 closing slightly lower yesterday while the DAX rose 0.2%.
• Locally, DFMGI, ADXGI and Tadawul ASI all closed higher in yesterday’s session with the DFMGI leading the gains at 0.4%, Egypt’s EGX30 closed -3.0% lower.   

Commodities

• Both WTI and Brent gained over 2% yesterday to $76.41/b and $81.68/b respectively, even as there appears to be no agreement yet on quotas for 2024 ahead of tomorrow’s OPEC+ meeting.
• The API reported a decline of 0.8mn barrels of crude in US inventories in the week ending 24 November. A further drop in inventories is expected this week.