Geopolitics and oil prices are still the top items on the MENA agenda, but how much do they matter for the markets?
Israel's decision to conduct strikes on Rafah increases the concerns about a wider and more prolonged regional conflict. It is generally futile to make short-term predictions about the region as things can change rapidly, which might be the reason behind the current strength in the region's markets: No one would be really surprised to see a ceasefire in progress this week, for example . Even oil prices are not moving in line with the negative news flow recently, but rather the macro supply-demand picture. As such, despite these two items, investors are still following UST levels as well as country- and company-specific developments. We see no reason for this attitude to change going forward.
However, one thing is clear: widening spreads bring new buyers to the market.