- Mena bonds in demand
- US-Mena spread narrows
- S&P GCC index up 7.9% this year
Middle East and North African sovereign bond prices have mounted a sustained rally ahead of a widely anticipated cut in US interest rates this week. But they may struggle to gain further unless the Federal Reserve makes a larger-than-expected reduction.
The resurgence is part of a wider relief rally in so-called risk assets as Donald Trump’s tariff policy, which was widely anticipated to hurt global economic growth, proves less onerous than feared. Bond and equity prices tumbled briefly following the US president’s April 2 “Liberation Day” announcement.
Expectations of imminent US rate reductions have further intensified demand for Mena bonds as investors sought to buy debt paying a higher coupon than bonds issued after any cut.
“The price movement on Mena bonds will likely be limited” following this week’s rate…
