While Chinese stocks bounced, the rest of Asia sold off sharply as the emerging market correction continues to roll on the dual theme of growing concerns with rising inflation and interest rates. The developed markets of Europe and the futures in the US are lower as some realize that buying big cap multinationals everyday on the hopes for global growth has to be met at some point with the reality of the emerging market selloff where most of the incremental growth is for these same multinationals. The BoE left policy unchanged as expected and we’ll have to wait a few weeks to see the minutes from the meeting to determine if they are any closer to eventually raising rates due to their own stagflation dilemma. After touching a record high, yields in Portugal are lower on talk of ECB buying but Irish yields are nearing their record highs again as we still await more details on any expansion of the EFSF.
