Daily Brief Macro: Emerging Markets Outlook and Strategy for September 2025 and more

• Global growth has been better than expected, particularly in emerging markets, due to strong export performance and tech cycle strength
• China’s growth is expected to slip below 3% in the second half, with domestic demand slowing sharply
• Despite the growth resilience in EM, central banks are expected to continue their gradual cutting cycle due to weak domestic demand and disinflation trends

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• China’s share of US imports will halve in 2025 from Mar’18 peak of 21.8%, and ASEAN’s share (led by Vietnam) will rise to 14%. India, Korea, Taiwan’s shares gain too. 
• There was a big surge in Asian exports to the US in Jun-Jul’25 to beat tariffs, but tariffs will alter patterns in 4Q2025, cutting export growth and reducing US disinflation. 
• The rebound in US steel production (+4.6%YoY in Jun-Jul’25) and ISM manufacturing new orders suggests select American industries (metals, automobiles, electronics) will gain but downstream users will suffer steadily more. 

• Chairman Powell has effectively locked the Fed into lowering its policy rate this month with another pivot towards forecast-dependent policy conduct, analogous to the events during 2024 Q4.
• The credibility of Chairman Powell’s view of labour market conditions has been significantly undermined by  recent weaker gains in non-farm payrolls, as well as due to the annual benchmark revision.
• Policy uncertainty remains elevated, particularly with respect to final tariff outcomes due to legal issues. Financial markets need to focus on evolving longer-term inflation trends under new Fed leadership. 

• OPEC’s Group of Eight discussed unwinding production cuts and increasing oil production, led by Saudi Arabia to bring energy prices down
• OPEC’s cooperation with non-OPEC producers, including Russia and Kazakhstan, resulted in a 2 million barrels per day production cut in late 2022
• Dr. Anas Alhaji, Energy Outlook Advisors managing partner, discussed OPEC’s actions and outlook on oil prices in an interview with Macro Voices host, Eric Townsend

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• Rick Reeder, Chief Investment Officer of Global Fixed Income at Blackrock, discusses the importance of income over duration and the opportunities in the market
• The US economy is in good shape with potential for 5% nominal GDP growth, but risks exist with high inflation and debt levels
• Reeder emphasizes the need for investors to be mindful of complacency, exit strategies, and downside protection in their portfolios

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• During the week, Anglo American bought the Canadian copper miner Teck Resources – creating a $50 billion copper giant. The company will be rebranded to Anglo Teck.
• With the deal, the company expects to give shareholders close to 70% copper exposure.
• Anglo Teck will hold a portfolio of producing operations, including “six world-class copper assets, alongside high-quality premium iron ore and zinc businesses.” 

• Price structures have remained resilient in 2025, with Brent and WTI in backwardation despite OPEC supply hikes and increasing crude inventories
• Five conditions were needed for crude prices to start reflecting year-end weakness, but only two have materialized so far
• OECD crude inventories have not built as aggressively as expected, with a lopsided increase in global stocks outside of Western markets, particularly in China

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• The dollar has not been able to break out of its range, despite various economic factors at play
• Asian currencies, such as the Chinese yuan, have seen more traction and movement compared to the dollar
• Continued US-China negotiations are impacting the market dynamics and influencing the direction of currencies like the yuan

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.