Most stock markets in the Gulf ended lower on Thursday after U.S. economic data indicated that the rate easing cycle may not come as early as some had initially hoped.

Robust U.S. retail sales data on Wednesday boosted bets that the Federal Reserve may not quickly move to slash interest rates, with the CME FedWatch tool showing a roughly 60% chance of a cut in March, down from about 70% a month ago.

Fed Governor Christopher Waller said earlier this week the U.S. is “within striking distance” of the central bank’s 2% inflation goal, but warned against rushing toward rate cuts until it is clear that lower inflation is sustainable.

Most Gulf currencies are pegged to the dollar, and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the United Arab Emirates and Qatar.

Saudi Arabia’s benchmark index dropped 0.9%, hit by a 0.6% fall in Ades Holding Co.

Most Gulf markets retreat on interest rate worries

However, oil behemoth Saudi Aramco gained 0.5%.

Oil prices - a catalyst for the Gulf’s financial markets - rose as the IEA joined producer group OPEC in forecasting relatively strong growth in global oil demand this year, with price impetus also coming from disruption to U.S. output and geopolitical risks in the Middle East.

Dubai’s main share index finished 0.9% lower, dragged down by a 2.3% fall in blue-chip developer Emaar Properties.

In Abu Dhabi, the index eased 0.1%.

The United Arab Emirates has adopted a new law regulating public-private partnerships, which came into force on Dec. 1, state news agency WAM said on Thursday.

Individual emirates, such as Dubai, also have their own frameworks governing PPPs.

The Qatari benchmark slipped 0.8%, with Qatar Islamic Bank declining 2%.

Outside the Gulf, Egypt’s blue-chip index added 0.3%, helped by a 6% jump in Credit Agricole Egypt.

Separately, Egypt’s cabinet has approved a draft law authorising oil exploration in the Ras Qattara development area in the western desert, the cabinet said in a statement on Wednesday.

========================================== SAUDI ARABIA     down 0.9% to 11,959 ABU DHABI        fell 0.1% to 9,719 DUBAI            dropped 0.9% to 4,053 QATAR            declined 0.8% to 10,319 EGYPT            rose 0.3% to 26,843 BAHRAIN          added 0.2% to 1,992 OMAN             eased 0.1% to 4,587 KUWAIT           lost 0.3% to 7,922==========================================