China's Liquidity Crisis Is Not Over: 1-Day Repo Jumps 127bps

Tyler Durden's picture

Back from the lunar new year celebrations - having missed out on all the excitement in global turmoiling markets - the Chinese markets are re-open for business. However, despite the world of status-quo-apologists telling us that China's liquidity crisis was a storm in a teacup and would blow over once the 'normal' new year needs were met (and CEQ#1 was bailed out), it turns out that liquidity needs remain high... very high. Repo rates across the spectrum are higher with immediate overnight liquidity costs up 127bps to 4.27%. Get back to work Mr. PBOC as there's CNY 375 billion of year-end liquidity to be mopped up (tightened out of the system).


Repo markets are on the rise again...


And remember all that liquidity will mature/roll off in a week or so...unless the PBOC folds on its reform mandates...


So that's CNY 375 billion about to be sucked out... no wonder the market's need for liquidity is high.


Charts: Bloomberg

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Spungo's picture

Will any of this affect the price of gold in World of Warcraft?

Oh regional Indian's picture

Nice, a double virtual reference to a thing which in reality is a horrorshow. Go to war indeed. 

Wish for peace. We need Piece. A piece. Whirled Peases.


disabledvet's picture

I shouldn't laugh at that but indeed..."too funny." The "piece de resistance" perhaps? Hehehehehehe.

That yuan is WORTHLESS. These are VERY wise Chinese folks buying all that gold. But this isn't about "liquidity" but DOLARES.

They have trillions in yen "as hard currency" that simply put "isn't hard currency anymore."

I think a good argument can be made that China is about to implode...but we'll see.

Very interesting story on the right name for the Sea between Japan and South Korea "getting the right name in US textbooks."

We'll see how markets open tomorrow but I think we might be in for a "Shokku" as the Japanese famously called it in the 80's.

NoDebt's picture

It's over, Johnny.  It's over.

Dr. Bonzo's picture

Urgh, just be advised, the Lunar New Year calender date is a single day, but the Lunar New Year event itself is naerly 15-days. This isn't just over yet, it hasn't really started.