Dollar Holds Steady as Markets Shift Focus to 2026 Rate Cut Expectations 
Asian Currencies Steady as Rupee Hits Record Low Amid Fed Rate Cut Bets 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
U.S. Futures Steady as Rate-Cut Bets Rise on Soft Labor Data 
Spain’s Industrial Output Records Steady Growth in October Amid Revised September Figures 
European Stocks Rise as Markets Await Key U.S. Inflation Data 
Asian Markets Stabilize as Wall Street Rebounds and Rate Concerns Ease 
European Oil & Gas Stocks Face 2026 With Cautious Outlook Amid Valuation Pressure 
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook 
Oil Prices Hold Steady as Ukraine Tensions and Fed Cut Expectations Support Market 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
China’s Services Sector Posts Slowest Growth in Five Months as Demand Softens 
Japan’s Nikkei Drops as Markets Await Key U.S. Inflation Data 
Oil Prices Rise as Ukraine Targets Russian Energy Infrastructure 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
Asian Currencies Edge Higher as Markets Look to Fed Rate Cut; Rupee Steadies Near Record Lows 
Germany’s Economic Recovery Slows as Trade Tensions and Rising Costs Weigh on Growth 
A weaker U.S. dollar and falling interest rates usually provide a lift to emerging markets, and this time China—often lagging in global rallies—may benefit from an unusual tailwind. While the Federal Reserve’s first rate cut since December failed to stir U.S. equities, history shows Chinese markets often respond more positively to easier U.S. monetary policy.
UBS analysis highlights that in the six months following the first U.S. rate cut in the last three easing cycles (2007, 2019, and 2024), the MSCI China Index delivered an average return of 11%, beating broader emerging market and global peers by 7 and 13 percentage points. Offshore Chinese stocks such as New York-listed ADRs and Hong Kong H-shares typically outperformed onshore A-shares, though this cycle could prove different.
Tech-heavy segments like internet platforms, data centers, and semiconductor stocks were past winners, rallying over 25% compared to the broader market. However, cyclical and defensive plays—such as energy producers, utilities, and transport operators—lagged, as did high-beta sectors like autos, insurance, and property. The data suggests that rate cuts alone don’t repair structurally weak industries.
Still, sentiment toward China remains fragile. With patchy economic growth, unclear policy signals, and a lack of catalysts beyond low valuations, foreign investors remain cautious. UBS this time favors A-shares, expecting local retail inflows to offset weaker foreign appetite for ADRs.
Looking ahead, UBS forecasts further Fed cuts in October and December, totaling 75 basis points, which could drive the U.S. dollar lower and ease pressure on the yuan. A softer dollar may reduce China’s capital outflows, support funding conditions, and stabilize currency risk.
Investors may not need to believe in a Chinese economic rebound; simply seeing conditions stop worsening could attract flows. With Chinese equities trading at a 30% discount to developed peers, even a modest shift in momentum could offer a much-needed reprieve.
