Celebrating China's First Bond Default: Copper Limit Down, Yuan Crashes Most In Six Years

Tyler Durden's picture

It would appear the fecal matter is starting to come into contact with the rotating object in China. Worrying headlines are beginning to mount on the back of real economic events (an actual default and a collapse in exports):

  • *COPPER IN SHANGHAI FALLS BY 5% DAILY LIMIT TO 46,670 YUAN A TON
  • *CHINA YUAN WEAKENS 0.46% TO 6.1564 VS U.S. DOLLAR
  • *YUAN DROPS MOST SINCE 2008

Aside from that Iron ore prices are crumbling, Asian stocks are dropping, Chinese corporate bond prices aee falling at their fastest pace in almost 4 months, and all this as 7-day repo drops to one-year lows (as banks hoard liquidity).

 

Item #1: The forced unwind of massive rehypothecated copper lots related to concerns over shadow-banking defaults sparked by the fact that Chaori was allowed to actually default...

 

Pushing Shanghai copper limit down...

 

Item #2: Iron Ore prices collapsing for similar reasons (as borrowers rotated to Steel and by-products for collateral on their shadow bank lending facilities)...

 

Item #3: Corporate bond prices are dropping at their fastest in 4 months...

 

Item #4: Repo rates are at near-record lows as banks hoard liquidity...

 

Item #5: USDCNY is tumbling as PBOC efforts to unwind the massvley one-sided carry trade appear to be getting out of control...

 

Item #6: AsiaPac stocks are down by their most in almost 6 weeks...

 

Item #7: Even US equity futures are unhappy (with JPY carry having caught up and now dumping again)...

 

Bonus Item: Copper-to-Gold ratios are collapsing...

 

Charts: Bloomberg