The combination of falling Chinese imports and exports, Moody's downgrade of ten US small and medium-sized banks is serving to squash risk appetites. Equities are weak, but bond markets are strong despite the surprise tax on Italian banks announced yesterday and the kick-off of the US $103 bln refunding today. Outside of Japan and Australia, Asia Pacific equity markets were lower led by a 1.8% drop in the Hang Seng and a nearly 2.2% loss of the mainland shares that trade there. The 0.65% fall in Europe's Stoxx 600 offset the gains of the past two sessions plus some. US equity futures are around 0.5% lower. Bond are ... (full story)