Writing's on the wall

This song in the James Bond movie Spectre won the Academy award for
the best original song. As November gave way to December, I am
reminded of the song in the context of bond of a different hue. It seems in
the dust raised by cancellation of Rs.500 and Rs.1000 denomination notes
by the Indian Government, we have not taken note of few major events in
the world. Here are few select ones:
1. Subsequent to the election of Donald Trump as US president, the
market seems to be confident of an inflation caused by increased
expenditures, which in turn, will make US corporations richer. The focus
moves to equity from bonds. In last month, more than a USD 1 Trillion of
value in the bond market has been wiped out as investors moved away
from bond to equity. U.S. Treasury index saw a 1.91 percent decline on a
total return basis, biggest weekly drop since June 2009. US treasury bill
yield rose to 2,4% on Nov 23rd, up from 1.8% on Nov 1st.
2. Most bonds in the World market suffered similar faith as their yields
went up. Does it mean that money will flow into these countries?
Interestingly, in November. investors poured in more than USD 1 billion
into treasury inflation-protected securities as a hedge against a pick-up in
inflation - endorsing the widely-held belief that inflation will rise. If it does,
US will raise interest rates and the money will start running into US bonds,
in search of the ultimate El Dorado where safety courts return. This will
see a bond market mayhem in other countries - their cost of fund going
up. A Bloomberg measure of emerging-market Eurobonds, comprising
sovereign and corporate securities, recorded 3.3 percent fall in November.
3. The MCSI emerging market index and the MCSI emerging market
currency index both showed decline during November - 4.7% and 3%
respectively. Not good - what do you say?
4. OPEC approved the first supply cuts in eight years and sent the Brent
crude surging 8.8 percent to $50.47 a barrel. Colombian peso and the
Russian rouble strengthened at least 1.5 percent, but for which the MCSI
index would have shown greater loss. Brent crude future for Feb 2017 is
USD 54.42 and for Dec 2017 it is 56.45.- as of now.
5. Trump like sentiment is likely to be seen in elections in Euro zone that
can potentially challenge the unity of Eurozone. Lined up are Austrian
presidential repeat, Italian constitutional referendum on December 4,
Romanian general elections on December 11, Netherlands election in

March, French Presidential elections in late April-May, Germany in

September, Czech Republic in October -- and so on. A weakened Eurozone
would mean a weak Euro - and further flight of funds to US.
What will be the impact on India? Let experts make their claims. All I know
is that if GDP falls, oil prices increase, Dollar gains - the impact cannot be
positive.
The writing's on the wall, are we readying ourselves?