Chinese President Xi Jinping and former Brazilian President Luiz Inácio Lula da Silva emphasized the need for the Global South to have more influence, as they attended a summit with other BRICS leaders to discuss boosting their presence on the world stage and possibly introducing a common unit of currency.
The Chinese bond market is experiencing a significant shift due to concerns over China's economic growth prospects, including a bursting property bubble and lack of government stimulus, leading to potential capital flight and pressure on the yuan, which could result in increased selling of US Treasuries by Chinese banks and a rethink of global growth expectations.
Most emerging market currencies were subdued as investors awaited the U.S. Federal Reserve chair's speech, while South Africa's rand rallied after inflation slowed and China stocks fell despite a share buyback rush.
Chinese President Xi Jinping announced at the BRICS leaders' summit in South Africa that the group is inviting six countries to join and also launching a $10 billion special fund to bolster global development, emphasizing the expansion's vitality for cooperation and the common interests of emerging markets and developing countries.
The US's grip on the global economy was demonstrated at the Jackson Hole gathering, while the Johannesburg gathering of the Brics countries showed a challenge to America's dominance, highlighting tensions between the US and emerging market countries and the potential shift in the international financial system.
The BRICS 2023 Summit saw the expansion of the alliance with the addition of six countries, potentially leading to a shift in the global economic order and significant de-dollarization efforts, while notable absences by Vladimir Putin and Chinese President Xi Jinping raised concerns, and China and India made progress in their border talks.
Indian Prime Minister Narendra Modi's exchange with Chinese President Xi Jinping at the BRICS summit in South Africa suggests a potential thawing of the financial relationship between the two countries, with India showing interest in a larger Chinese presence in its businesses and a softening of its screening policy for investments.
World markets remain buoyant despite the increasing possibility of another U.S. interest rate hike and the focus on U.S. employment, with China's stock markets extending their rally and bond markets stabilizing.
Emerging markets were shaken by investor concerns over the US economy and the strengthening dollar, causing an equity rally led by China's stimulus plans to be short-lived.
Global interest rate hikes, challenges in China, a stronger dollar, and political instability in Africa have impacted emerging market assets, causing stock and currency declines and property market concerns in China, while Turkey's markets have seen a boost in response to interest rate hikes, and African debt markets have experienced a significant pullback.
The absence of President Xi Jinping from the G20 summit and the expansion of the Brics bloc highlight the declining interest of non-Western powers in Western-led institutions, signaling a shift towards alternative economic and financial arrangements.
China's credit demand improved, deflationary pressures eased, and the yuan rallied, indicating signs of stabilization in the economy and financial markets after a sharp downturn.
The BRICS expansion, which includes countries like Saudi Arabia, the UAE, and Iran, has raised concerns in the U.S. and EU as it poses a threat to Western-dominated financial markets, while China's influence grows and the alliance aims for de-dollarization in global trade.
Global stocks eased as a drop in U.S. homebuilding highlighted the challenges the Federal Reserve faces in managing inflation, while oil prices rose and investors await rate decisions from major central banks.
