Focus: Second wave, economic forecasts and the Federal Reserve

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Updated 19 June 2020

Focus: Second wave, economic forecasts and the Federal Reserve

What happened:

Global stock markets ended their rally. Mid-week, the Nasdaq briefly broke the 10,000, while the S&P 500 reached pre-pandemic levels. Afterwards, market contractions saw their worst since March on fears of a second wave of the pandemic and a pessimistic outlook for the US economy by Chair of the Federal Reserve Jerome Powell — views that were echoed by the grim forecasts of the Organisation for Economic Co-operation and Development (OECD) countries. Sentiments turned risk-off, wiping off $2 trillion in US equities on Thursday.

First quarter non-bank business debt in the US jumped the most since 1952 to $16.8 trillion on the issuance of bonds and loans.

Initial jobless claims for the week ending June 5 came in at 1.54 million. Worldwide hiring rates may have stabilized, but they are still at depressed levels.

OPEC+ extended its 9.7 million barrels-per-day (bpd) cuts for another month. Afterwards, the 23 countries will the reduce production by 7.7 million bpd through 2020 and by 5.8 million bpd through April 30, 2021. KSA, the UAE and Kuwait are ending their voluntary additional cuts of 1.2 million at the end of June. Saudi Arabia and Russia cracked down on non-compliance with laggards, which exceeded 1 million bpd. Performance will be monitored monthly. Oil initially rallied on the news, but had its worst week since April, reflecting the general risk-off sentiments in markets.

British Airways, Ryanair and EasyJet are suing the UK over the two-week quarantine rule for incoming passengers.  

Mubadala Investment Co., which has $232 billion in assets, reported 2019 total comprehensive income at $53 billion, up more than 4 times from 2018. Deputy Chief Financial Officer Saeed Al-Mazrouei said that the fund was poised to invest overseas, benefitting from attractive valuations.

According to The Financial Times, KSA is considering cancelling Hajj due to the coronavirus disease (COVID-19) pandemic for the first time since the founding of the Saudi Kingdom in 1932. Revenues from the Hajj and Umrah pilgrimages were expected to contribute in excess of $12 billion to the Saudi economy in 2020.


As economies started to open, global COVID-19 cases surpassed the 7.5 million mark, which sparked fears about a second wave.

Houston is reportedly considering re-imposing a second lockdown after a dramatic resurgence of cases. Meanwhile, US Secretary of Treasury Steven Mnuchin went on record against shutting the economy again.

Both the OECD and the Federal Reserve voiced fears about a second wave. The OECD’s economic outlook forecasted global economic activity to fall by 6 percent in 2020 and OECD unemployment to rise to 9.2 percent. In case of a second outbreak, the global economy would shrink by 7.6 percent this year, before climbing back 2.8 percent in 2021. The average unemployment rate in OECD countries would rise to 10 percent in that case.

Federal Reserve officials predict the US economy to contract by 6.5 percent and recover by growing 5 percent in 2021 and 3.5 percent in 2022. They predict unemployment to come down to 9.3 percent by the end of the year.

Powell fears that the pandemic will leave permanent scars in the economy. He is also concerned about the poorer segments of society, as well as African Americans and Hispanics, being disproportionately affected. Powell predicts the shape of the recovery to come in the form of a U rather than a V. Inflation is forecast at 1.7 percent, which is below target.

The Federal Reserve will leave rates unchanged close to zero for the foreseeable future, or at least until the end of 2022. It is continuing its asset purchasing program, et altera buying around $20 billion in Treasury purchases per week.

Negative interest rates still seem to not be considered among policy options. However, the Federal Open Market Committee is said to have discussed explicit forward guidance of interest rates and yield curve control by targeting specific interest rates depending on the duration of the debt. The latter was reportedly still an “open question.”

Powell is keeping his eyes firmly focused on the real economy, providing liquidity to the system, inflation and employment. He is less concerned about asset bubbles.

Where we go from here:

The UK government announced that it would temporarily adopt a light-touch regime of checking EU imports both in case of a deal or no-deal Brexit. This is a reflection of the Brexit negotiations not having made enough progress to reach an agreement by the end of June and the fact that the UK economy is reeling from the impact of the COVID-19 crisis (GDP contracted by 20 percent in April).

On the other side of the channel, the EU is concerned by certain economies (like Ireland or Belgium) being hard hit by a potential no-deal Brexit.


— Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources.
Twitter: @MeyerResources

How brands are celebrating Saudi National Day

Updated 24 September 2020

How brands are celebrating Saudi National Day

RIYADH: The 90th Saudi National Day is one of pride and celebration not only for the people of the Kingdom – but brands too. From offering discounts, to musical playlists, and social media events, here’s how brands are joining in:

In celebration of National Day in Saudi Arabia, is running a sale until Sept. 26 offering discounts of up to 70 percent. It represents the first National Day sale for, which launched earlier in the year for customers in the Kingdom.


Careem KSA is celebrating by offering people getting engaged on its social media platform a chance to win gold bars and coins.


With current circumstances changing the way people celebrate, and to mark the Kingdom’s 90th National Day, Twitter launched a 90-minute trivia quiz via its @TwitterMENA account in the region. The virtual celebration challenges people on their knowledge about the Kingdom, from historical moments and culinary arts, to hidden gems and sporting prowess.

Twitter teamed up with a series of Saudi experts, covering a wide range of sectors including travel, food, history, entertainment, education, and sports.

The experts, including Abdullah Al-Jumah (@AAlJumah), Abdul Aziz Alyami (@azeez000a), Dr. Bandar Alghamiz (@BAlghmaiz), Bader Al-Fouzan (@B_alfouzan), Malk Alsulaimy (@ARCH1993), and Abdulelah Alfares (@AbdulelahAlfars), also supported the campaign by sharing hints and insights about the topics.

In addition, Twitter has created an emoji of the Saudi flag that is triggered whenever the following hashtags are tweeted throughout the month of September: #SaudiNationalDay; #SaudiNationalDay2020; and #SaudiNationalDay90.

A dedicated event page in both Arabic and English will also be launched, providing people with real-time updates on activities, including videos and Moments (collections of tweets). The event page will be accessible through either the Twitter Explore section or on top of people’s timelines, for those who have already engaged with #SaudiNationalDay content on Twitter. Alternatively, people can find the page by searching Saudi National Day on Twitter.


To celebrate the 90th Saudi National Day, Snapchat’s official lens creator, Fahad Mutlaq, has created an anti-reflection (AR) lens that allows Snapchatters to celebrate the event even when physically apart, giving them the chance to share cool snaps while celebrating at home.

Abdulla Al-Hammadi, regional business lead at Snap Inc., said: “We are committed to bringing AR experiences to Snapchatters in the KSA. Given the exceptional times that the world is going through due to the COVID-19 pandemic, this lens comes to provide our community in Saudi Arabia with the chance to express their love for their country while they are celebrating National Day.”

Mutlaq said: “Creating an interactive lens that allows Snapchatters to celebrate this occasion from home, using the Kingdom’s official National Day slogan, colors, and logo, has been an absolute honor.

“By leveraging the power of AR, Snapchat has been bringing exceptional experiences to Snapchatters in the Kingdom, allowing them to create memorable, interactive moments on unique occasions such as the Saudi National Day.”

Emirates NBD

The 90th Saudi National Day comes amid a challenging year on all levels. Emirates NBD wanted this film to act as a thank you letter on behalf of all Saudis to those who have helped the Kingdom reach its 90th National Day safely – the heroes who have relentlessly and responsibly worked behind the scenes hand-in-hand with the government to ensure people’s safety, making the Kingdom a safe land full of blessings.

The film celebrates Saudi National Day through an emotional script, written in a poetic way and complemented by a musical score that goes along with a compilation of footage showing people and scenery from throughout the Kingdom.


The global music streaming service Deezer launched a campaign called “Let’s sing for the homeland,” inviting all music fans to use a specially designed online feature to nominate songs that best express the love that people have for the Kingdom.

The final compilation of songs, unveiled on Saudi National Day under the banner “Saudi Flow: Le Noghani Lel Watan,” offers a unique musical experience created by music fans and curated by Deezer to celebrate the country. The campaign aims to bring the nation closer together through music.

Tarek Mounir, Deezer CEO for the Middle East, North Africa (MENA), and Turkey said: “We want every music fan to be able to celebrate their love for this beautiful and spirited country. We have imagined ‘Let’s sing for the homeland’ as a place where people can come together as one, united by music.

“Saudi Flow will reflect the nation’s musical DNA. I would like to invite everyone to join the online celebrations and create the nation’s first flow.”

Saudi Flow has been inspired by Deezer’s signature feature Flow, which is based on a proprietary algorithm and recommendations from its professional music editors. It offers an endless mix of old favorites and new recommendations in one ever-evolving stream.

While Deezer’s algorithm is responsible for presenting every listener’s personal preferences, the flow of a whole country should reflect the preferences of its people, but it is still supported by Deezer’s editors and technology.

Join the celebrations today and nominate your song by visiting


As national identity remains resolute in the face of a global pandemic, Ithra, the King Abdul Aziz Center for World Culture, is proud to celebrate Saudi Arabia’s 90th National Day with a host of activities dedicated to the Kingdom’s culture.

Ithra’s National Day offering runs until Sept. 26 with events including exhibitions, family activities, storytelling, a game competition, Saudi cuisine, workshops, poetry, music, dance, and folk performances.

Highlights include the opening of the Kingdom of Cultures exhibit, which takes visitors through Saudi Arabia’s varied landscapes to meet its diverse people and experience its rich cultural legacy. It will run for 90 days.

Takya is a fine-dining experience featuring an innovative blend of authentic, fusion, and contemporary cuisine. There is also The Market, which brings creativity and design into Khobar with a reimagining of the central vegetable market in Al-Ulaya with an artist area, performances, and food trucks.

Al-Farabi band accompanied by Abeer Balubaid on piano and singer Ameen Farsi headline the music program, while Abdulatif bin Yousef presents poetry night.