Global Markets on Edge Amidst Fed Watch and Geopolitical Strains

Emerging markets remained steady as investors awaited the U.S. Federal Reserve's rate decision. Despite potential for strong rallies, geopolitical tensions and fiscal uncertainties, like in Hungary, pose challenges. China showed robust export growth, while Thai and Benin political issues added to global market complexities.

Emerging market assets saw little movement on Monday as investors held their positions in anticipation of the U.S. Federal Reserve's interest rate decision. This comes after recent gains, as traders assess positive economic data from China amid new geopolitical tensions worldwide.

MSCI's index of emerging market stocks inched up 0.04%, while its currency index dipped 0.03%. Expectations of U.S. rate cuts have driven optimism for a rally in regional markets as the year ends. Lower rates often result in a weaker dollar, lowering financing costs for emerging market enterprises and boosting demand for regional currencies.

New tensions have emerged between Thailand and Cambodia, affecting Thai equities and the Thai baht. In Africa, Benin's bonds dropped following a failed coup attempt. Meanwhile, customs data revealed China's export surge, driven by increased shipments to non-U.S. destinations, amidst changing global trade dynamics.