Hormuz reopens as markets wait for trade flows and confidence to recover Pdf-2

Regional markets – Hormuz passage resumes, but caution remains

After the US–Iran MOU was signed, the Strait of Hormuz reopened and tanker traffic resumed. Oil shipments have started to recover, but flows remain below pre-conflict levelsand vessels are still being asked to coordinate passage in advance. This should support risk appetite in GCC equities, although the recovery in shipping volumes, freight costs and insurance premia is likely to be gradual. Investors will also watch whether the 60-day negotiation window holds, after Saudi Arabia’s Foreign Minister warned that trust with Iran must be rebuilt before broader economic cooperation can resume.

Global markets – US PCE, PMIs and bank stress tests to guide rate expectations

Global markets will focus on US inflation, growth and banking sector signals this week. The main release will be May personal income and spending data, including the Fed’s preferred PCE inflation gauge, with core PCE expected to accelerate to 0.3% MoM from 0.2% in April. Durable goods orders are expected to fall after April’s strong increase, while preliminary S&P Global PMIs, regional Fed surveys and the third estimate of 1Q GDP will give investors a broader read on US momentum. The Fed’s 2026 bank stress test results will also be watched by financials investors. Outside the US, PMIs are due from the Euro Area, Germany, France, the UK, Japan and India, while China is expected to keep loan prime rates unchanged.

Note to Management – Investors continue to support quarterly reporting

In a letter to the SEC, the CFA Institute cited a member survey showing strong investor support for quarterly reporting. The survey found that 62% of respondents oppose replacing quarterly reporting with semi-annual reporting, while 63% believe the benefits of quarterly reporting exceed the costs. Around 70% oppose giving companies flexibility to determine or change their own reporting frequency, and nearly 85% are concerned that flexible reporting frequency and format would reduce comparability between companies. Although 82% support allowing voluntary quarterly reporting if semi-annual reporting is adopted, only 32% expect companies would continue reporting quarterly if reporting became optional. Earlier this month, the SEC’s own Investor Advisory Committee formally recommended that the SEC reject the proposal.

GCC markets advanced last week as investors priced the US-Iran MOU and the technical reopening of the Strait of Hormuz, although Friday’s UAE pullback showed caution remains.
Dubai (+3.5%) led the region, followed by Bahrain (+2.4%), Qatar (+2.4%) and Abu Dhabi (+2.2%). Saudi Arabia (+0.7%) and Kuwait (+0.4%) posted modest gains, while Oman (-0.9%) ended lower. Emirates NBD, FAB, Aldar and Emaar were among the key UAE movers as regional risk appetite improved.

US markets had a shorter trading week due to the Juneteenth holiday. The NASDAQ (+2.6%) led gains, followed by the S&P 500 (+0.9%) and Dow Jones (+0.7%). European markets were mixed but mostly higher, with the DAX (+1.4%) and CAC 40 (+0.8%) advancing, while the FTSE 100 (-1.0%) declined. Investor focus remained on energy prices, central bank decisions and whether the improvement in geopolitical risk can hold.

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