00:00Saudi Arabia's economy looking pretty resilient, despite the regional context.
00:05I just want to ask you, first of all, what's been happening on the equity markets?
00:08I think that's exactly the message.
00:09In fact, although the economies in the region are very much very close to where the unfortunate events are taking
00:16place,
00:17actually, in terms of economic data and what's happening in the market,
00:21they're not showing the same levels of sensitivity as potentially some markets in Asia and so forth.
00:27I think when you look at what's happening in the tetherworld, we've got a year-to-date advance now of
00:315%.
00:32This year, they're going to be moderate to around 0.3% this week.
00:37And again, what you're also seeing on a global picture, you have the S&P 500,
00:42which has hit its 16th record high for 2026, just a couple of days ago.
00:47You've got markets running across Asia, mainly in South Korea and Japan,
00:52based on this hopeful ceasefire extension news.
00:55And those are the economies that are seen to be more sensitive by all price imports,
01:00what's happening in the Strait of Hormuz, and so forth.
01:02And I just want to quickly point the picture here of what's happening in the United States
01:05and what actually might help emerging market focus, including Saudi Arabia, over the second half of 2026.
01:12You've had inflation data a couple of days ago that's come out from the United States,
01:16shown its fastest pace of increase for roughly three to four years.
01:20It's the pace that we haven't seen since the start of the Russian-Ukraine events.
01:25And that actually suggests that the U.S. Federal Reserve are going to keep interest rates in the United States
01:31unchanged, likely for the remainder of 2026, unless the traffic in the Strait of Hormuz clears up very fast.
01:38But that's unlikely to be the case.
01:39And that means for emerging markets, what's happening in the GCC specifically,
01:43those currencies that are pegged to the West dollar, they're likely to see more resilience and strength.
01:48And there's going to be less temptation to take flows and investments out of emerging markets
01:53based on the United States unlikely to cut interest rates,
01:56which is something we thought would happen on a regular occurrence in 2026.
02:00But geopolitics had different ideas.
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