To show my solidarity with our American cousins, I'm off for a proper lunch with clients in the West End and Malbec rules* will probably apply.

What happened in China this morning? Stocks down sharply (the steepest decline this year), on the back of rising inflation worries. Dong! – that strikes a chord. It seems yesterday's Porridge – dealing with the threat of an inflation shock – was perfectly timed. Suddenly everyone is waking up to the I-threat. 

China is in sharp focus – bond yields keep climbing despite the PBOC injecting liquidity. My colleague Ara Levonian downstairs on the BGC floor points out we've got over $1 trillion of Chinese corporate debt coming up for refinancing next year. Put all the clues together: an inflationary environment, supply-side policies driving up wages and inflation, rising rates, and a large number of highly geared companies facing rate risk?

Do you think it might end up messy? (Messy? Yes, but terminal probably not.. the Chinese can press the money spigot again and again.)

And how different is the US? That's why I'm watching the high-yield market – that's where the bond supernova is going to erupt. Just like the next Icelandic volcano we can feel the high-yield market spluttering beneath our feet as an ominous cloud of steam rises above the glacier….