It started with Turkey cutting rates early in August then Brazil cutting its benchmark rate at the end of the month. Earlier this week Indonesia cut its benchmark interest rate by 0.25% to 6.5%. The August moves were easier to dismiss as one-off events, especially Brazil where the central bank is less than independent of the government which was pushing for lower rates in the wake of fiscal concessions. In terms of emerging markets cutting rates, there could well then be more to come. The central bank in Mexico meets later this week and a cut in rates (from the current 4.5%) cannot be ruled out, with the authorities having recently pushed through a variety of measures to boost credit growth and private investment in the face of the global slowdown. Over the period 2007-10, it was notable just how much emerging markets managed to decouple from the developed world. The BRICs (Brazil, Russia, India and China) grew nearly 25% over the period, whilst output in the G7 fell 1%. Furthermore, the IMF forecasts public debt rising in the developed world in the coming years and falling in emerging markets. Rate cuts, combined with recent currency declines, should bode well for next year, but right now emerging markets are getting sucked into the easing cycle that is developing and which will be a challenge for risk and carry trades going into year-end.