Good suspense drama is when an unlikely character emerges slowly as the principal hero or villain. There is a compelling analogy in financial markets.

Everyone is focused on the capital market and real resource implications of the great economic convergence between the East and the West, but the markets tend to pay attention largely to the actions and intentions of the Federal Reserve and, periodically, the European Central Bank. Meanwhile, the People’s Bank of China (PBoC) is emerging as an increasingly important operator. It matters more than is widely recognised.

The Fed, in particular, has been cast (wrongly) as a villain for introducing a second round of quantitative easing, or QE2, allegedly causing inflation in assets and commodities. The end of QE2 next month has already been the subject of much concern that a sharp repricing of Treasury bonds will be the harbinger of new financial turbulence, and weaker economic growth. It is also being associated with both the recent correction in commodity prices, and, for some analysts, the cyclical downturn to follow.