We’ve now had the largest one-week drop in US stocks in over two years, and this is now developing into a decent risk off move. Analysts say that one of the main triggers for this was probably the rise in global bond yields. This was driven by a more hawkish Fed and higher US wage data. We highlight some interesting research from BAML that provides to evidence that the rates market in the US could be vulnerable to momentum traders which could feed a further sell off and TS Lombard examine the probable path of new Fed Chairman Jay Powell. Another interesting observation is that while equity volatilities have surged, FX volatility has picked up sharply and credit spreads have widened, the one exception has been emerging markets, which have held in well so far, notes Nomura. Given that we seem to have seen a cascading move into risk aversion from equities to FX to credit, we should keep an eye out for spikes in EM risk. We therefore highlight a very sanguine piece from MRB Partners below, who expect another good year for returns in the EM local debt markets.