After one of the most painful months for emerging markets in years, traders will be watching for what comes next – and also for signals that the Federal Reserve can foster global growth.

Last month proved disappointing for money managers betting on rising stocks and stronger currencies amid trade tension and a resurgent dollar. September may not be much better, with Argentina imposing capital controls amid a currency crisis.

“For EM prospects to improve, we would need to see the Fed turning more proactively dovish and/or trade tensions abating,” Morgan Stanley strategists including James Lord in London wrote in a note. “Neither of these outcomes seem likely for now.”

Morgan Stanley said it expects developing-nation currencies to depreciate about 2% against the greenback in the coming month.

The erratic US-China trade narrative was still in the spotlight as US tariffs on about US$110 billion of Chinese goods went into effect Sunday, as did Beijing’s countermeasures.

Data at the weekend showed a further deterioration in manufacturing output from the world’s no 2 economy.