The "manic Monday" turmoil that rocked global markets at the start of the week, eased during Asian hours on Tuesday and followed through in the European session sending global markets higher.
The loss of hundreds of billions of assets recently considered liquid by global financial institutions, through the de facto debt moratorium of capital controls, will be a huge shock to the global financial system.
Despite the latest stronger than expected China credit data, China still has a long way to go to: the latest data showed that China's credit impulse is still negative and remains at the lowest level it has been in two years.
"I think maybe we should be prepared for a new round of capital outflow and yuan deprecation. This may not happen, but we should prevent the problems before they happen."
"That’s what happens when you opt for multiculturalism as your number one political principle. It automatically negates shared values, so why even expect any agreement between groups contending for dominance?"
"Less liquidity, rising US$ and declining Rmb are deadly for EM equities. Turkey might just provide a trigger. Watch China and how it manages liquidity."
While traders will focus on Wednesday's retail sales number, the main focus will be the ongoing collapse in Turkey's currency and whether there will be contagion to other EMs as well as any escalations in the US-China trade war.
