"The US economy and financial markets have been pulling away from the rest of the world," Lonski observes in Moody's latest market briefing, which warns of further potential destabilisation of emerging market currencies by a strengthening US dollar.

"Emerging market countries having especially large current account deficits relative to GDP are vulnerable to dollar exchange rate appreciation," he says.

"The funding of large current account deficits requires large amounts of foreign-currency debt that is often denominated in US dollars. As the dollar appreciates vis-à-vis emerging market currencies, it becomes costlier to service dollar-denominated debt in terms of emerging market currencies.

"Moreover, a dollar that costs more in terms of foreign currencies tends to lower the prices of dollar-denominated industrial commodities. Unfortunately, just when emerging-market exporters of commodities need more support from the dollar-denominated commodity exports, the dollar price of such exports tends to fall."

Lonski says Moody's industrial metals price index has incurred "setbacks" of 12.4% since year-end 2017 and 9.3% compared to a year earlier.

"The industrial metals price index often serves as a useful coincident indicator of global industrial activity," he says.

"The calendar-year averages of the 20-years-ended 2017 show a surprisingly strong correlation of 0.83 between world economic growth (as estimated by the IMF) and the annual percent change of Moody's industrial metals price index."

Moody's says US manufacturing activity, measured by the country's ISM index, climbed up to 61.3 points in August 2018 for its highest reading since 61.4 points in May 2004.

"For the 12-months-ended August 2018, the ISM's manufacturing index averaged 59.3 points, which was its liveliest year-long average since the 59.3 points of the year-ended September 2004," it says.

"However, manufacturing strength appears to be limited to the US and helps to explain why the dollar strengthens and industrial metals prices soften.

"The global manufacturing PMI as calculated by JPMorgan/Markit last crested in December 2017 at 54.5 points and has since eased to the 52.5 points of August. Moreover, when the ISM index of US manufacturing activity last rivalled its August 2018 reading in May 2004, the global manufacturing PMI equalled 58.0 points.

"The global manufacturing PMI for August declined by 2.0 points since year-end 2017 and by 0.7 points from a year earlier.

"Both of those setbacks are consistent with the year-to-date and year-to-year retreats posted by the base metals price index.

"By contrast, the ISM index of US manufacturing activity for August was up by 2.0 points compared to both year-end 2017 and August 2017.

"To better understand how much livelier the US is relative to the rest of the world, consider how August 2018's 8.8-point premium of the ISM's index of US manufacturing activity over the global manufacturing PMI was a record high for a sample that commences in January 1998."