Major stock markets in the Gulf fell in early trade on Wednesday ahead of congressional testimony from Federal Reserve Chair Jerome Powell to gauge the interest rate cut cycle.

Traders are scouring US economic data and policymakers’ speeches to gauge when the Fed would start cutting rates.

Markets are pricing in a 68% chance of the Fed starting its easing cycle in June, the CME FedWatch tool showed, as well as 88 basis points of cuts this year.

Monetary policy in the six-member Gulf Cooperation Council is usually guided by the Fed policy because most regional currencies are pegged to the US dollar.

Dubai’s main share index dropped 0.6%, hit by a 6.4% fall in Commercial Bank and a 0.6% decrease in sharia-compliant lender Dubai Islamic Bank.

Most Gulf markets ease on falling oil; Saudi gains

In Abu Dhabi, the index eased 0.2%. The Qatari benchmark declined 0.9%, weighed down by a 1.6% fall in Qatar Islamic Bank.

Saudi Arabia’s benchmark index gained 0.7%, led by a 0.8% rise in Al Rajhi Bank and a 1.1% increase in Saudi Telecom Co. Elsewhere, oil giant Saudi Aramco added 0.3%.

Crude prices - a catalyst for the Gulf’s financial markets - edged higher supported by the announcement on Sunday that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) extended their output cuts of 2.2 million barrels per day until the end of the second quarter.