THIS MORNING: CBE gathers for its final policy meeting today + new GAFI services unit for EGX-listed companies + school’s out in Alexandria (again)
Good morning, friends, and welcome to the final day of the workweek. We’re looking forward to the weekend, even though our hopes of seeing Egypt in the Arab Cup final match on Saturday were dashed last night after the Pharaohs scored an own-goal in the last few seconds of their semi-final against Tunisia, who will now meet Algeria for the title.
WHAT’S HAPPENING TODAY-
It’s interest rate day — and the final one of 2021 at that: All 11 economists and analysts we surveyed in our Enterprise Rate Poll expect the Central Bank of Egypt’s Monetary Policy Committee to leave interest rates unchanged when it meets later today for its final gathering of the year. The still-unfolding situation with the Omicron variant is giving policymakers everywhere pause and a lower-than-expected November inflation reading could give the MPC some breathing room.
Also factoring into the CBE’s decision is the US Federal Reserve’s hawkish turn, which will see the Fed taper its bond-buying program twice as fast as originally expected in a bid to give itself breathing room to enact three rate hikes in 2022, the Federal Open Market Committee said yesterday following its two-day meeting.
The Fed now has a total of eight interest rate increases penciled in over the next three years, including three in 2023 and two in 2024, Fed Chair Jay Powell said at a presser following the meeting (watch, runtime: 1:01:44). The tightening plans come after US inflation in November ran at its highest since the 1980s, while Powell pointed to a recovering labor market and a “much stronger” economy as indicators that the first rate increase would quickly follow the end of the Fed’s asset purchase program.
Mind the yield curve: The treasuries yield curve flattened yesterday as yields on short-term treasuries rose, widening the spread with returns on the long-term government bonds. A flattening yield curve signals the Fed will be “challenged” to get inflation in check, and could constrain the central bank’s tightening cycle.
The market reaction: The faster taper and sooner-than-expected rate hike announcement spurred a rally in US markets, with the S&P 500 closing just shy of its all-time high and the Nasdaq 100 ending the trading day up 2.5%, according to Bloomberg.
The European Central Bank is also set to meet today, but is widely expected to stick to the transitory inflation line — which the Fed has notably left behind.
A new services unit for EGX-listed companies has been set up by the General Authority for Investment and Freezones (GAFI) to expedite services, handle complaints, and help troubleshoot any issues facing listed firms, the authority said in a statement yesterday.
Shoukry + Saudi FM meet today: Foreign Minister Sameh Shoukry will meet his Saudi counterpart Prince Faisal bin Farhan al-Saud for discussions, followed by a joint presser, Youm7 reports, without disclosing what the topics of discussion are planned to be.
Shoukry is also set to meet International Atomic Energy Agency Director Rafael Mariano Grossi later today.
PSA- School’s out in Alexandria for the Nth time: All schools across Alexandria will be closed today in anticipation of unstable weather conditions reported by the Meteorological Authority, according to a governorate statement. This is the third closure in recent weeks, with a bout of heavy rains and wind prompting Alex Governor Mohamed El Sherif to announce closures twice last week.
CIRCLE YOUR CALENDAR-
The UN Convention Against Corruption in Sharm El Sheikh is on its penultimate day today. The event wraps this coming Friday, 17 December.
It’s the final day of the Arab Conference on the Peaceful Uses of Atomic Energy in Aswan.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.