Chinese property firms' bonds were hit with another wrecking ball this week as Evergrande missed its third round of bond payments in as many weeks.
The Evergrande contagion has continued to spread in markets and we are seeing risk-off on Tuesday in Asia following a negative close on Wall Street, likely owing to the Wall Street Journal that flagged the Central Commission for Discipline Inspection investigation into banks.
More on this here: 'Xi Thought' and its impact on the corporate West
High-yield Chinese bond markets have been in trouble again due to the fears about fast-spreading contagion in the $5 trillion sector, which drives a sizable chunk of the Chinese economy, continued to savage sentiment.
''If you cut off funding to a highly leveraged sector, and it sees sales collapse too, bad things tend to happen to liquidity,'' analysts at Rabobank said in a note today.
''The FTSE Chinese High-Yield index has now tumbled to 275.4, the lowest since late 2015, when back in May it was at 375.4, and looks like a falling knife. Chinese government bond yields didn’t benefit, rising slightly, and more so down the curve.''
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2021 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.