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Market Movement – SEPTEMBER 2026: GROWTH MOMENTUM SUSTAINS AMID ELEVATED INTEREST RATES
22/09/2026 - 5:03:03 CH- Global interest rates are unlikely to ease quickly as major central banks continue to prioritize inflation control. The Fed raised the FFR by 25 bps to 3.75–4.00%, and the September projections showed that most FOMC members expect at least one further hike in 2026. The ECB also raised rates by 25 bps, while the BOE held steady but three members voted for a hike. In parallel, the US Treasury continues to support long-end liquidity but cannot offset pressure from inflation, Treasury supply and private-sector capital demand. Global funding costs therefore remain high at both the short and long ends of the yield curve. The Fed’s 25-bp hike was approved 12–0; the ECB raised its deposit rate to 2.50%; and the BOE held Bank Rate at 3.75% in a 6–3 vote.
- Energy remains a cost shock, but with clear differentiation across sectors. Brent has returned above US$100/bbl while refinery-capacity shortages and tight product inventories remain unresolved. Diesel, gasoline and jet fuel prices may therefore decline more slowly than crude even if geopolitical risk moderates. We favor companies that benefit directly from elevated refining margins and remain cautious on airlines, transportation and other fuel-intensive industries.
- Vietnam’s growth outlook remains positive but is becoming increasingly dependent on investment and capital efficiency. IIP rose 11.9% in 8M26, the manufacturing PMI reached 53.3 in August, disbursed FDI totaled US$17.25bn and public investment disbursement exceeded 50% of plan. By contrast, August CPI accelerated to 4.89% YoY and real retail sales growth was 7.6%, indicating that household demand remains weaker than manufacturing and investment. VND deposits rose 8.77% YTD as of Aug 22, above VND credit growth of 8.38%, easing the quantitative funding gap. However, renewed Fed tightening narrows the SBV’s room to ease through the USD–VND interest-rate differential and exchange-rate channels. Policy is therefore likely to remain focused on liquidity management and improving credit transmission rather than aggressive policy-rate cuts.
- Our trading strategy therefore continues to prioritize blue chips capable of delivering resilient earnings. We focus on stocks that are already included in, or are positioned to benefit from, the FTSE Emerging Markets universe, with reasonable valuations and visible earnings prospects. Preferred areas include banks with strong funding franchises, retail, steel and technology. Oil & gas/refining and fertilizers provide complementary exposure given their lower sensitivity to domestic funding costs and US tariff risks. Securities companies warrant a more selective approach because high interest rates and weak market liquidity reduce the scope for multiple expansion and retail investors’ demand for leveraged trading. Across sectors, the focus remains on companies that can convert revenue into EBIT and cash flow while demonstrating attractive returns on capital.
