China Interbank Market Freezes As Overnight Repo Explodes To 25%

by Joe Oliver, Forex Trading-Pips

 

China Interbank Market Freezes As Overnight Repo Explodes To 25% Zero Hedge: 

It seems liquidity (or counterparty mistrust) is beginning to reach extreme levels in China as the nation’s banking system is now quoting overnight repo transactions at 25%. The explosion in funding costs echoes the collapse in trust (and surge in TED spread) among US banks in the run-up to the Lehman bankruptcy. MSCI Asia-Pac stocks are down over 3% with China’s Shanghai Composite -2.5% at seven-month lows.

  • China‚Äôs 1-day Repo Rate Climbs to Highest Since at Least 2006
  • MNI – CHINA OVERNIGHT REPO FIXING AT RECORD HIGH

China’s bond market is also collapsing:

Yield on 3.1% govt bonds due January 2016 jumps 39 bps to 3.749%, biggest rise since notes were issued in January

China this week…

 

US in the run-up to Lehman…

 

Charts: Bloomberg…More at China Interbank Market Freezes As Overnight Repo Explodes To 25

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