The Federal Reserve has made its first significant interest rate cut in four years, sending a signal of easing to central banks in emerging market countries, with an optimistic outlook for the Southeast Asian market.

Typically, central bank rate cuts lead to a weakening of the local currency.

For central banks in emerging market countries, initiating rate cuts before the Fed's rate cut could lead to a devaluation of their own currency, a decline in investment attractiveness, an increase in import prices, and consequently, higher inflation.

With the Fed's official announcement of a 50 basis point rate cut overnight, central banks in other countries that have not yet entered an easing cycle can "breathe easy" and join the rate cut club, with these banks mainly located in Asia, particularly in Southeast Asia.

Currently, central banks in Southeast Asian countries are on the brink of an easing cycle.

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The Philippines took the lead in cutting rates in August, and Indonesia, supported by strong expectations of a Fed rate cut, lowered its key interest rate level on Wednesday this week.

J.P. Morgan Chase expects India to cut rates next month, while the central banks of South Korea and Thailand are expected to take action before the end of this year.

Wall Street Journal previously mentioned that due to the greater room for monetary policy easing by central banks in Southeast Asian countries, the local market outlook is generally optimistic.

Joevin Teo Chin-Ker, the investment director of Oriente Finance Singapore Pte Ltd, is optimistic about the bond and currency markets in Southeast Asia: The real interest rates in Southeast Asian countries are higher than a year ago, and there is room for further rate cuts, which is good news for the local bond market.

Over the past two months, fund managers have continued to increase their holdings of sovereign bonds in Thailand, Indonesia, and Malaysia.

For three months, they have been net buyers of stocks in Indonesia, Malaysia, and the Philippines.

These capital inflows have helped Southeast Asian currencies become the best performing currencies in the emerging markets this quarter.

In addition, the valuation advantages and low labor costs in the Southeast Asian region also provide a positive outlook for the local market.