Saudi Arabia is reportedly set to change tack and raise oil output to recapture lost market share, which would provide a mechanical lift to GDP and the Kingdom is in a strong position to weather any resulting drop in oil prices. The government should be able to avoid a return to the harsh austerity of 2014-16. Elsewhere, Egypt is planning to issue its first international bond next February as it tries to take advantage of improved investor sentiment since March’s policy shift. And finally, Israel-Hezbollah tensions are perilously close to boiling over with Israel threatening a possible invasion into Lebanon. This would mark a major escalation and could provoke Iran to intervene once more.
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