Fed Fallout Escalates: China Bond Market Crashes Most On Record, Yuan Plunges

Tyler Durden

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After a bubblicious surge higher over the last few months (as China’s hot money swishes from one trending-higher market to another), China’s bond market is collapsing just as we warned. As Chinese money-markets tighten into new year, yuan weakens, and capital outflows accelerate, so it appears the final bastion of safety has cracked. Chinese bond futures crashed overnight by the most on record, erasing in a week the gains of the last 18 months.

The rally began in 2014, buoyed by slowing economic growth and a monetary-easing cycle that kicked off in November that year. Now that is over…

 

As Chinese liquidity pressures ripple up from the short-term repo markets…

 

Offshore Yuan has tumbled 5 handles since The Fed raised rates…

 

And Japanese stocks cannot hold a bid despite the weaker yen.

It appears Janet’s message about Trump’s fiscal plan is starting to sink in.

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