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CelebratingChina’sFirstBondDefault: CopperLimitDown, YuanCrashesMostInSixYears
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Itwouldappearthe fecal matterisstartingto come intocontactwiththerotatingobjectin China. Worrying headlines are beginning to mount on the back of real economic events (an actual default and a collapse in exports):
*COPPERINSHANGHAIFALLSBY 5% DAILYLIMITTO 46,670 YUAN A TON*CHINA YUANWEAKENS 0.46% TO 6.1564 VS U.S. DOLLAR*YUANDROPSMOSTSINCE 2008
Aside from that Iron ore prices are crumbling, Asian stocks are dropping, Chinese corporate bond prices aee falling at their fastest pace in almost 4 months, and all this as 7-day repo drops to one-year lows (as banks hoard liquidity).
Item #1: The forced unwind of massive rehypothecated copper lots related to concerns over shadow-banking defaults sparked by the fact that Chaori was allowed to actually default…
Pushing Shanghai copper limit down…
Item #2: Iron Ore prices collapsing for similar reasons (as borrowers rotated to Steel and by-products for collateral on their shadow bank lending facilities)…
Item #3: Corporate bond prices are dropping at their fastest in 4 months…
Item #4: Repo rates are at near-record lows as banks hoard liquidity…
Item #5: USDCNY is tumbling as PBOC efforts to unwind the massvley one-sided carry trade appear to be getting out of control…
Item #6: AsiaPac stocks are down by their most in almost 6 weeks…
Item #7: Even US equity futures are unhappy (with JPY carry having caught up and now dumping again)…
Bonus Item: Copper-to-Gold ratios are collapsing…
Charts: Bloomberg
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