Fresh warning signs for EMs amid expectations for hawkish Fed pivot: Analysts are warning of the damage emerging markets will experience if the Federal Reserve increases its interest rates up to 6%, Reuters reported. “Fed tightening towards 6% would firmly test historical ‘pain thresholds’ for emerging market assets,” one UBS strategist wrote in a note, forecasting the CNY and the INR to be among the currencies that weaken as much as 5% in that scenario.

Markets are bracing for a larger 50-bps rate hike from the Fed last this month after Chairman Jerome Powell suggested last week that the central bank could need to hike interest rates further and faster than previously expected on the back of strong February economic data. The likes of Sri Lanka, Nigeria, and Pakistan are already struggling to get their hands on raw materials and medicine thanks to USD shortages.

“Frontier markets is where you'll likely see the brunt of the hit,” said a strategist at Ninety One. Around 30 countries — including Egypt — currently have debt trading at distressed levels (defined as having bonds with yields trading at least 10 percentage points above US treasuries), and further interest rate hikes in the US will only put these countries under more pressure.

ALSO WORTH NOTING-

• Growth in Dubai’s private sector continues to slow: Growth in Dubai’s non-oil private sector softened to a 12-month low in February amid falling new orders expansion and price pressures, according to the S&P Global PMI (pdf).
• Turkey has raised USD 2.25 bn in its first debt offering since last month’s earthquakes through a 3x oversubscribed sale of USD-denominated bonds at a yield of 9.5%. Turkey has now raised USD 5 bn from bond sales so far this year. (Bloomberg)

	EGX30	16,454	+0.9% (YTD: +12.7%)
	USD (CBE)	Buy 30.84	Sell 30.94
	USD at CIB	Buy 30.85	Sell 30.95
	Interest rates CBE	16.25% deposit	17.25% lending
	Tadawul	10,463	+0.5% (YTD: -0.2%)
	ADX	9,828	-0.3% (YTD: -3.8%)
	DFM	3,386	-0.7% (YTD: +1.5%)
	S&P 500	3,862	-1.5% (YTD: +0.6%)
	FTSE 100	7,748	-1.7% (YTD: +4.0%)
	Euro Stoxx 50	4,230	-1.3% (YTD: +11.5%)
	Brent crude	USD 82.78	+1.5%
	Natural gas (Nymex)	USD 2.43	-4.4%
	Gold	USD 1,867.20	+1.8%
	BTC	USD 20,495	+1.9% (YTD: +24.1%)

THE CLOSING BELL-

The EGX30 rose 0.9% at Thursday’s close on turnover of EGP 1.7 bn (16.7% below the 90-day average). Foreign investors were net sellers. The index is up 12.7% YTD.

In the green: Oriental Weavers (+4.8%), Egypt Kuwait Holding (+4.0%) and Alexandria Mineral Oils Company (+2.8%).

In the red: Juhayna (-2.7%), Edita (-2.7%) and CIRA Education (-2.4%).