Short Sellers Are Aggravating China's Bond Rout - Regulators AWOL (For Now)

Chinese regulators have a history of clamping down on bearish wagers in the stock and currency markets, but have yet to take measures to prevent short-selling of bonds. If none are forthcoming, we expect to see more of the cascading sell-offs in Chinese government bonds, corporate bonds and equities which were a feature of trading in November.

What Is Behind China's Bond Rout?

What happened in China in the past two weeks that led to a bond rout and drove up interest rates sharply? Here are the possibilities...

Meanwhile... The Yield Curve Is Crashing-er

Remember Monday when stocks jumped and the yield curve steepened and every talking head and their pet rabbit said the bond market is about to explode... well the yield curve is now imploding again with 5s30s crashing almost 10bps to 64bps - the lowest since Oct 2007.

Frontrunning: December 1

  • Tillerson, Cohn Could Leave White House in Wave of Senior Departures (WSJ)
  • Senate grapples with tax cut plan's impact on deficit (Reuters)
  • Here’s Where the GOP Tax Plan Stands Right Now (BBG)
  • Markets ignore best European factory data in 17 years (Reuters)
  • Tax Debate Plays Out in TV Ads Targeting Key States Across U.S. (BBG)

Global Stocks, US Futures Slide As Tax Bill Chaos Erupts In The Senate

Markets were thrown for a loop in the past 24 hours, with the Dow first soaring nearly 400 points on Thursday on expectations that tax reform was a done deal, when drama emerged just after the close when the Senate tax bill came this close to falling apart when the proposed "Trigger" was ruled as invalid, pushing a Thursday vote to this morning, and sending global stocks sliding over concerns of its passage.

Russia Plans First-Ever Sale Of Yuan Bonds

"It would be wise of Russia to tap the yuan market now. China remains Russia’s biggest trade partner, China’s enormous financial system has lots of buying potential, too."