Emerging Markets Insights: All eyes on the Fed

The upcoming US Federal Reserve meeting on September 17-18 is drawing attention, with markets eager to see the extent of potential interest rate cuts, particularly in light of a weakening US dollar and rebounding global equities. In China, the property market is facing a downturn with July home sales among top developers dropping 27%, exacerbated by the elimination of price guidance in several cities; however, this price adjustment could assist in stabilizing the market long-term.

Meanwhile, the Mexican peso has depreciated 15% since the June presidential elections, influenced by proposed judicial reforms that raise concerns about government power over the judiciary. In the context of recent economic data, China’s consumption and e-commerce sectors are experiencing challenges, yet selected companies are adopting strategies to enhance profitability, including share buyback programs.

The August market review highlighted a recovery in equities despite earlier recession fears, with emerging Asia performing well overall, particularly India and Brazil, while geopolitical tensions in Europe and Latin America persist.