In the middle of September, global market saw a 25bs cut by the Fed, bringing down the upper bound of the rate to 4.25%. Although the decision was an expected one (cut probability was >89%), the most significant aspect of the cut was the more dovish stance of the institution. In the meeting, the Fed highlighted evolving risks associated with the labour market, which it saw as more imminent compared to the inflation risks from Trump tariff war. Also significant is the fact that Fed dot plot was showing potential further cuts in 2025. 9 out of 19 members think there should be 1 more cut until end of 2025, while the remaining 10 thought there should be 2 cuts. Regardless, we think the September cut and potential for more follow-ups nearing the end of the year, is very much a positive for equities, given its nature as a long-duration asset.

Still on the Fed, we also note that Stephen Miran, Trump appointee for Fed Governor, has assumed office in 16 September 2025. As during the September FOMC Miran voted for a 50bps cut compared to others who voted for 25bps, we view him as a more aggressive member compared to Powell who may cater more to White House’s wishes for lower rates. From this angle, we think the thesis of more rate cuts is even more likely in the following FOMC meetings.

Last but not least, we also note the continued stalemate in the US & China trade war, with Trump conversing with Xi directly in the third week of the month. Given both leaders described the meeting as positive and Trump’s mention of visiting China directly next year, we think the current stability will hold in the medium-term. This is a very good news, and we expect markets to appreciate further on the back of positive events.

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EQUITY FUND
MGSED A	MGSED invests in Sharia-compliant Equities Abroad listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio.
MASED A	MASED invests in Sharia-compliant Equities in Asia listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio.

 

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DISCLAIMER

The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.In July, global market appeared to be tinted with a more bullish sentiment. We saw an almost uniform increase in the indices of US, China, and Indonesia, with EU lagging behind. The movement may be an indication of what the market sees as stabilisation in global economic & political landscapes, such as near-term conclusion of US tariffs and Trump’s softening stance on China. At the time of writing, many countries have struck a deal regarding tariffs with the US. Major countries such as India have secured a 25% tariff, while the EU is at 15%. In light of this deal, Trump has also expressed a more friendly tone toward China, mentioning that he will deal with the country in a very friendly fashion. We note however that China itself is still in a negotiating process with the US, and faces a separate deadline until the 12th of August. Indonesia itself secured a 19% tariff deal, on par with the Philippines but relatively lower compared to peers. Regardless, global market itself seems to have become comfortable with the tariff issue, and further news on negotiations or deals may have a more muted impact going forward. China’s domestic economy has also shown some positive signs, including its 5.2% YOY GDP growth in 2Q25, supported by frontrunning companies seeking to secure inventory before additional tariff uncertainties. China has also recently made an announcement on the largest dam in the world to be built, while at the same time conducting an audit of its coking coal miners. The project, alongside the audit may benefit commodities relating to metallurgy and at the same time push China’s economy toward further recovery.

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