As equities become expensive throughout the emerging market space, volatility is becoming routine affair and is increasing with each passing day. This is also getting support from bad news coming from US subprime mess and concerns over growth slowdown along with ailing credit markets. Year 2008 will test nerves of every investor/trader in commodity and equity markets. Dollar must stabalise against Yen, Euro, Canadian dollar in order to restore stability in currency markets and hence in broader financial markets. United States Of America is going through painful process of rising home loan, credit card, auto loan defaults along with falling home prices. This coupled with firm inflation is making US fed reluctant to cut rates aggressively but he has to chose between containing economic crisis by cutting rates and continued higher inflation due to surplus cash in the system, i bet he will chose the latter. So any rate cut this time around by 50 basis point will make equities more appealing to investors, especially equities of emerging markets like India, China, South Korea, Taiwan. Next few trading sessions are crucial as volatility prevailing in the markets has to subside in order to restore investor and trader confidance.