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Tadawul Shares Start Week Higher on US-Iran Peace Deal Hopes

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Saudi Exchange-traded closed Sunday upbeat as the prospects of a US and Iran peace deal pushed the Tadawul All Share Index 0.57% firmly in the green.

Investors are patiently waiting for updates regarding the signing of an interim deal that would end the conflict between the US and Iran. US President Donald Trump signaled that the memorandum of understanding would be signed on Sunday.

However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated that the peace framework will be signed "in the coming days." An undisclosed senior Iranian official said that the final draft of its deal reportedly includes the reopening of the Strait of Hormuz, oil sanction waivers, releasing frozen Iranian assets, as well as other nuclear clauses.

Looking ahead to the week, the local economic calendar will mostly be empty except for the release of Saudi Arabia's inflation print for May on Monday. Market watchers will also look out for the Federal Reserve's interest rate decision and economic projections on Wednesday.

"In terms of Wednesday's FOMC meeting, we expect the Fed to leave monetary policy unchanged, but we do expect a statement that puts greater emphasis on the possibility of an interest rate rise," ING said in a note. "In the press conference, he will likely acknowledge that economic conditions do not justify rate cuts at this time. Nonetheless, he could reiterate his view that, in time, tech investment will boost US productivity, meaning faster growth without generating inflation. That would imply a lower neutral interest rate that justifies lower policy rates over the medium to longer term."

Back at home and on the corporate front, Saudi Pharmaceutical Industries and Medical Appliances (SASE:2070), d/b/a Spimaco, shares ticked up 3.58% at closing as it agreed to boost its stake in Arabian Medical Products Manufacturing, or Enayah, to 63% for 45 million Saudi riyals.

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