Here’s what could go right (and wrong) for Gulf bonds next year

Here’s what could go right (and wrong) for Gulf bonds next year:

The performance of nearly $340bn of Eurobonds in the Gulf Arab region depends on what the Federal Reserve does next.

Securities from the Gulf Co-operation Council are poised for their worst year since 2013, and could face another painful 12 months if the US maintains its pace of rate increases. That, and the risk of more declines in oil prices, will keep investors on tenterhooks, although inclusion in JPMorgan Chase & Co’s emerging-market bond indexes starting January will likely attract billions of dollars.

The good news is that investors are now reducing bets on the number of rate increases in 2019 as they weigh the prospect of slowing global economic growth, fading US fiscal stimulus and volatile financial markets.