The late September spike in Chinese equities was very much a trading rather than an investment move and, having pulled back, is now consolidating. We do not see the authorities trying to boost consumer spending by encouraging borrowing, rather that these latest measures are about providing liquidity and thus allowing the housing market to clear at lower prices. More interesting is the medium term efforts to make savings more productive by building a proper capital market, replacing cash for savers and bank loans for companies with pension funds and capital markets. This looks like the start of that process and we suspect there will thus be a focus on long term investing, solid dividends and well regulated corporate bond and equity markets for savers.

The term "October Surprise' refers to an event that is timed to coincide with US Presidential Elections. While we obviously can not predict any unforeseen event, we can highlight things that are happening that may be brought to our attention this month. One such is the UNIT, the plan for a BRICS+ trading currency, backed by a mixture of currencies and Gold. This is not about replacing the Dollar a s reserve currency, more about replacing SWIFT as a Global Exchange, with wider implications for the FX markets - $6tn a year of Global trade supports $7.5trn a day of FX markets. Take the $ out of half of those trades and the system faces a dramatic reset.\, including diversification away from the $

October has poor seasonality, none worse than in an Election year. After a strong q3, especially for equal weighted SPW (a proxy for active managers), we see caution prevailing in q4, with profits being taken and cash waiting to react rather than trying predict. We don't believe either the US or China are going for a big monetary stimulus and see the latter in particular as allowing creative destruction of the speculative property developers while setting up for a Capital Market with Chinese characteristics. Retail may get excited about China short term, but the long term asset allocation story is the one to buy on the dips. Meanwhile, diversification and the Dollar are a key focus, especially with the BRICS+ summit this month raising the prospects of a new trading currency - the UNIT