Major stock markets in the Gulf were subdued in early trade on Wednesday, in line with Asian shares as traders weighed the odds of a super-sized Federal Reserve interest rate cut later in the day.

The chances of the Fed kicking off its easing cycle with a super-sized cut of 50 basis points (bps) oscillated in Asia, retreating to 63% early in the day from 67% around the same time on Tuesday, before stabilising around 65%, according to LSEG data.

Monetary policy in the Gulf Cooperation Council (GCC), which includes the UAE, often aligns with the Fed’s decisions as most of the regional currencies are pegged to the US dollar. Saudi Arabia’s benchmark index was flat.

Dubai’s main share index eased 0.3%, hit by a 1% fall in blue-chip developer Emaar Properties.

Major Gulf markets inch up ahead of expected Fed rate cut

In Abu Dhabi, the index lost 0.2%.

Oil prices - a catalyst for the Gulf’s financial markets - fell after two sessions of gains, as weak macroeconomic data weighed on demand, offsetting the possible supply disruption from violence in the Middle East and the potentially bullish impact of an expected US rate cut.

The Qatari benchmark traded flat.