Oil is in a low trading range - not continually falling

The Outlook discusses most of the MENA countries in some detail. The re-pricing of oil has provoked reforms and fiscal effectiveness by GCC oil producers. Here in the UAE, Governments had already begun tightening fiscally more than a few years before oil prices fell.

Existing MENA currency pegs should remain although ‘basket’ currency pricing is more likely in the future. Looking at MENA equities, market valuations have become more compelling after the steep falls of last year. More balanced crude oil price sentiment going forward may present some opportunities.

We are positive on Egypt; it is an important country in the region, with almost 90 million people, and a large economy. It wouldn’t take much to go right for investors to do well, provided policy measures include a currency devaluation.

On major G7 currencies, we are still looking for signs of an end to the dollar bull market. This has been made more complicated by a new round of competitive currency devaluations around the world.

Unless the Fed also goes to negative deposit rates we expect the U.S. dollar to continue to strengthen. Regarding sterling, we believe talk of the ‘Brexit’ has been more than factored in, and that the currency could do well in the second half of the year after the vote.