Pressure Cooker

Liquidity pressures have intensified considerably in China’s money markets, with the Fed’s interest rate hike and hawkish messaging complementing continued tightening steps by the PBOC to flush out speculative leveraged positions by non-bank financial institutions. The first casualties were seen in China’s fixed income markets this week, but the central bank’s tightening bias will persist, and liquidity pressures will continue through January and the Chinese New Year holiday.

Posted August 1, 2017
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