25 November 2020
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Monthly Insights - November 2020

Our final Monthly Insights publication of 2020, looking at the latest developments and trends in global and regional economics and markets.

By Daniel Richards

2020 2021 vaccine building blocks

As an eventful 2020 draws towards its close we take stock of how developments towards the end of the year - not least the positive news with regards potential Covid-19 vaccines - have boosted market optimism, while at the same time cautioning that the recovery will be uneven in many quarters and that there remain difficult months ahead.

 

Global macro: The rapid-fire succession of positive news with regards to Covid-19 vaccine trials in recent weeks has instilled a sense of optimism into global markets not seen in months. Nevertheless, the next several months will remain difficult, and policy missteps could slow the 2021 recovery.

GCC macro: Positive news on Covid-19 vaccines suggests there is light at the end of the covid tunnel.  However, we expect the recovery in the GCC next year to be slow and uneven.   

MENA macro: Oil production curbs and the Covid-19 pandemic have weighed heavily on the Iraqi economy in 2020, and we project a contraction of -12.5% this year. Looking ahead to 2021 we anticipate a return to growth, but output will remain substantially lower than it was in 2019 still, as a potential extension of OPEC+ mandated oil production curbs and a lingering pandemic fallout weighs on the recovery. We forecast a 3.4% expansion next year.

Currencies: The US election has dominated the FX landscape in the last few weeks. With that now behind us policy developments in the UK and EU will set the scene for a weaker USD as we head into 2021.

Financial Markets: US treasury markets have now absorbed the impact of Joe Biden becoming president-elect and several successful Covid-19 vaccine candidates. As yields have pushed upward we think there are still some strong forces ahead that will prevent them from popping too much higher.

Commodities: OPEC+ faces a challenging final meeting of the year as oil demand conditions remain soft and members begin to chafe at perpetual production restrictions.

Sector report: Dubai’s real estate market had an interesting year in 2020 as enthusiasm for Expo 2020 supported market dynamics in Q1, before Covid-19 lockdowns in Q2 ground much of the activity in the market to a halt. Activity has picked up in Q3, however Covid-19 has changed the dynamics.

This is our last Monthly Insights publication for 2020; we will resume in January 2021 and wish all our readers well over the festive season. 

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Written By

Daniel Richards Senior Economist

Edward Bell Acting Group Head of Research and Chief Economist

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Emirates NBD Research Research Analyst

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Emirates NBD Research Head of Research & Chief Economist

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Emirates NBD Research Research Analyst


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