In GCC markets, investor sentiment could be impacted by concerns over the economic fallout from new U.S. tariffs on China, Canada and Mexico
Asian shares rose on Monday as markets awaited new tariffs by the new U.S. administration. Meanwhile, bitcoin surged after U.S. President Donald Trump announced on social media five digital assets he expected to include in a new U.S. strategic reserve, including bitcoin, ether, XRP, solana and cardano.
Bitcoin surged 10 percent on Sunday before trimming some gains on Monday to $93,230, while ether fell back to $2,448 after climbing 13 percent yesterday.
GCC market: Earnings, shareholder meetings and tariffs in focus
Several factors are driving market sentiment this week as investors await the announcement of new U.S. tariffs. In GCC markets, investor sentiment could be impacted by concerns over the economic fallout from new U.S. tariffs on China, Canada and Mexico, said Iridium in its latest report. The MSCI February 2025 index rebalancing, set to take effect this week, could also introduce some market volatility.
On the corporate agenda this week, Alliance Insurance, Energy House, HEISCO, MERS, NGI, Salik, Saudi Aramco and Sharjah Cement, among others, will post their 4Q 2024 results. Additionally, DGC, MTM, Parkin, Renaissance Services, SSPW, and more will host 4Q 2024 earnings calls.
Several companies – including Al Yamamah Steel, Baladna, and CBD – will convene shareholder meetings to approve dividend distributions, bonus shares, and other corporate actions.
Last week, GCC equity markets closed lower across the board, except for Bahrain which saw a 1 percent gain, marking gains for the second consecutive week.
MENA economic outlook
Iridium also noted that the MENA region’s economic growth is projected to reach 3.4 percent in 2025, exceeding both 2024 levels and the 2014–2023 average of 2.5 percent, according to the latest FocusEconomics Consensus Forecast. Growth will be fueled by a recovery in oil production and strength in non-oil sectors, particularly in the Gulf. Meanwhile, inflation is expected to stabilize at 5.9 percent in 2025, lower than in previous years.
However, risks persist, including currency devaluations, geopolitical uncertainties and supply chain disruptions. Regional central banks are likely to align with the U.S. Federal Reserve’s monetary policy, with a potential rate cut towards the end of 2025. Despite challenges remaining, the overall economic outlook for 2025 appears moderately positive.
U.S. economy worries resurface
The U.S. is expected to begin imposing tariffs on Mexico, Canada and China this week, a move that could significantly impact global trade. Meanwhile, key economic data will shape investor expectations.
Market worries about the health of the U.S. economy resurfaced after the release of soft data. Data released on Friday showed that U.S. consumer spending unexpectedly fell in January. The U.S. Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index rose 0.3 percent in January and increased 2.5 percent over the past twelve months, down slightly from 2.6 percent in December.
The report also revealed that U.S. consumer spending unexpectedly dropped 0.2 percent last month, marking the first decline since March 2023 and the biggest decrease in nearly four years, fueling worries about the U.S. growth outlook.
U.S. to impose tariffs on Canada and Mexico on Tuesday
On Sunday, U.S. Commerce Secretary Howard Lutnick said tariffs on Canada and Mexico will go into effect on Tuesday, but that Trump would determine whether to stick with the planned 25 percent level.
An extra 10 percent levy on Chinese imports is also due to come into effect this week, just as the country’s National People’s Congress opens its third annual session on Wednesday where stimulus measures and possible reprisals against the U.S. could be announced.
The ISM February Manufacturing PMI and U.S. monthly jobs report will provide insight into domestic economic conditions amid tariff-related uncertainties.
Read: Oil prices gain 0.25 percent on positive Chinese manufacturing data
ECB to make 25 basis-point rate cut
In Europe, the ECB will announce its rate decision on March 6 following the release of an inflation report. Markets anticipate a 25 basis-point rate cut to 2.50 percent on Thursday.
In Asia, investors will focus on China’s PMI data and the government’s announcement of 2025 GDP growth targets, which could influence sentiment around the country’s economic trajectory.
