Is the Fed set to press fast-forward on its stimulus wind-down? Economists expect the US Federal Reserve to taper its bond-buying program in order to start raising interest rates much more rapidly than expected, according to a Financial Times poll. More than half of the 48 respondents said the Fed would likely stop its stimulus purchases entirely by the end of March, months ahead of the schedule announced by the central bank in November.

Half of the economists surveyed now also expect a rate rise in 2Q2022 — an outcome just 20% of them believed likely three months ago. The predictions come as Fed head Jay Powell and other officials turn hawkish on sustained US inflation, as a stronger labor market leaves the bank more wiggle room to clamp down on rising prices.

A steeper taper could spell turbulence for our bond market: The Omicron variant and the decision to keep Powell as Fed head for another term fueled risk-off sentiment at the end of November, leading to a wobble in emerging-market debt ETFs. Egyptian assets saw net outflows of USD 19.3 mn, or 12%, in the last week of last month. That said, Egyptian assets held in ETFs are peanuts compared to the bns of USD invested directly in local-currency bonds — and one of the highest real interest rates in the world should ensure we can still compete in a world of higher US rates.

Speaking of our attractive interest rates: Keep an eye out for November’s inflation figures due to be released tomorrow. Further rises in inflation could soon start to make the EGP less attractive, especially as the US and other countries begin to roll back covid stimulus and raise rates.

The Saudi stock exchange surged on its trading debut, with shares in the bourse closing up 13% after rising as much as 22% following the exchange’s USD 1 bn IPO, Bloomberg reports. The Tadawul’s float marks the biggest exchange IPO since Euronext went public in 2014, as investors were persuaded to buy in based on bumper YTD gains amid the so-called Middle East IPO rush. The Saudi exchange has 50 IPO applications in the pipeline for 2022, the bourse’s CEO told Reuters on the day of its debut. The Tadawul is also considering following our lead and introducing SPACs to the kingdom, Khalid al-Hussan told the newswire.

THE CLOSING BELL-

The EGX30 fell 0.8% yesterday on turnover of EGP 1.24 bn (12.1% below the 90-day average). Foreign investors were net sellers. The index is up 5.6% YTD.

In the green: Ezz Steel (+6.2%), Cleopatra Hospital (+4.7%) and Rameda (+3.4%).

In the red: Speed Medical (-20.0%), Heliopolis Housing (-7.0%) and Fawry (-6.4%).

Major Asian benchmarks are largely (if, uhm, “flatt-ish-ly” — is that a word?) in the green this morning, with only the Nikkei flirting with the red. Futures suggest much of Europe and Wall Street will (weakly) open in positive territory later today.