Well bonds are moving to higher yields. At the moment, pretty much everything is moving against the trend.

The move in bond yields can create an exit signal on the various carry trades, so look for increased volatility in currencies. The A$ was pretty wild yesterday and it was one of the higher yield destinations, as was the NZ$, although smaller capital flows [small economy] came this way.

China and their credit squeeze is obviously playing on investors nerves. A credit meltdown in China now, with all the other Central Banks out of ammunition, would be a really bad outcome. But, it looks very possible, even ‘likely’ at the moment.

This is not a buy-the-dip moment. There has been a change in ‘something’. Not too sure what that something is, but, when markets are this manipulated, something always goes wrong…looks like it might be that time currently.