Despite the short term noise around specific events, and the rises and falls that follow them, there are signs of further dislocation between the emerging markets and the western economies.

A case in point is today's news that Spain was being downgraded by Moody's and Ireland's surprise early announcement on the cost of a bailout. Unlike equity markets, the European credit default swap markets which measure the cost of insurance against rallied in early morning trading, but as you can see in this chart from Markit, in absolute terms the European periphery is losing out to Middle Eastern countries, including crisis hit Dubai, in the race to normalisation.