This is the week when deflation reared its ugly head and started reminding investors of the dangers it can pose to economic stability. At times it sounds esoteric, but as the experiences of the 1930’s and of Japan in the past 20 years show, deflation makes life tough for consumers, companies, governments by increasing the cost of debt and strangling economic activity.

Markets around the world were battered overnight by a surge in volatility not seen since the days of late 2008 after Lehman Brothers collapsed, triggering the GFC.

The share and currency markets yesterday ignored a blunt warning of a looming, possibly ‘violent‘ crash from one of the most senior executives at the Reserve Bank yesterday.

It was ‘a flash in the pan’ according to the National Australia Bank in its monthly survey of business conditions and confidence yesterday as it revealed business conditions and confidence both fell in September.

China’s official statistics continue to hold a unique ability to surprise on the upside.

Is there a rebound in iron ore prices underway?

Another test for market confidence later today with the start of the flow of important data on the Chinese economy for the month of September and the quarter.

And then there were an even dozen, including Australia.

Now for another ‘red’ start to the week on equity markets in Australia and Asia and it’s clear another week of big falls could be ahead.

Global oil markets are in increasing disarray. Opec is split, with Saudi Arabia leading the way by cutting prices and pushing up production.

More pain ahead for Australian policymakers and companies who depend on the accuracy and credibility of the monthly jobless data from the Australian Bureau of Statistics.

Welcome to the new normal for markets here and offshore for the next short while – rising volatility as the Fed moves to end its third round of quantitative easing. Investment banks, hedge funds and other speculators will love the rise in unpredictability in markets, small investors will be powerless.

The increasingly wild trading conditions on global markets, especially in the US continued this morning with the Dow, S&P 500 and the Nasdaq all roaring back with big gains.

In a major about turn, the Australian Bureau of Statistics will today restate the jobless data for July and August when it reveals the September employment data. And the September figures will be presented unadjusted for seasonal factors, moves that have stunned economists in government and in the private sector.

As expected the Reserve Bank has left the cash rate unchanged at 2.5%, where it has been since last August with governor Glenn Stevens ending his statement, as he has done for months now by referring to the need for “a period of stability in interest rates”.

The Reserve Bank won’t change interest rates at its October meeting later today, but there are a couple of things to watch for.

Australian interest rates and jobs report dominate this week, to the exclusion of other events here and offshore.

Despite all the gloom and doom on the sharemarket and in all that commentary about housing (and retail sales on Wednesday), the economy continues to grow at a weak, but unsurprising level.

Warren Buffett got a lot of publicity in the US on Thursday night (our time) with his company’s acquisition of America’s Van Tuyl Group, the fifth-largest auto dealership firm in the country and also the largest privately-owned dealer.

For a moment yesterday the worry-worts and panic-heads in the markets swooned and the value of the dollar and the stockmarket slid after weaker than expected retail sales data for August was released.