In financial markets perception drives reality. China: China has been on a campaign of international engagement and integration. This opportunity has emerged as America has become more self-sufficient and insular and China has not wasted it. The desire to engage and adopt international protocols and norms is driven by self-interest. China knows that it can

The Saudi’s have been pumping oil out of the ground come hell or high water, behaving as an insolvent merchant might. The market suspected that this was part of a ploy to drive more expensive producers like the US shale producers out of business. US rig counts are down but the Saudi’s continue to pump

Why have interest rates been falling steadily for such a long time? Let’s think about interest rates in terms of the demand and supply of bonds, and not as the cost of credit or some abstract cost of money. Demand for bonds: Savings and Investment. Households may deploy their savings in bonds. Households save out

FOMC: Current expectations Dec 21, 2015. The Fed raised rates last week Dec 16 by 0.25%. Currently, the market expects 4 rate hikes in 2016. There are 4 FOMC meetings in 2016 in which a press conference follows and it is at these that interest rates are expected to be raised. Interest rates are not

Last week the FOMC finally raised interest rates, the first time in 9 years. Risk markets rallied in relief before falling back on concerns in commodities and credit markets. Equities Year to date MSCI World is -3.45%. The S&P is -2.6%, FTSE is -7.8%, MXAPJ  is -13.6% and MSCI Emerging Markets is -15.3%. In China,