Even if the current drift towards an all-out trade war between the US and China is halted (which we doubt), weaker global demand will drag on regional exports. With domestic demand also likely to struggle in many places, we think GDP growth across the region will continue to weaken over the next couple of years. The outlook for monetary policy is mixed. We expect to see further rate hikes in the Philippines, Indonesia, India and Pakistan over the coming months. Elsewhere, with inflationary pressures under control most other central banks, including those in Korea, Taiwan and Malaysia are likely to leave policy settings unchanged over the next year. Currencies and equity markets look set for further falls if we are right that slower growth in the US and China leads to a further deterioration in sentiment towards emerging markets.