Offshore-Onshore Yuan Spread At 1-Month Wides Hinting At Outflows As Japanese Stocks 'Mysteriously' Meltup At The Open

Since China GDP was unleashed, Offshore Yuan (CNH) has weakened significantly relative to Onshore Yuan (CNY). After over 3 weeks of 'stability' with CNY and CNH on top of each other, it appears selling pressure has reappeared suggesting outflows are on the rise (despite PBOC's best efforts to hide/manage them) which may explain why Treasuries were so relatively weak today. The "will-never-learn" Chinese investors pile in once again extending the period of margin debt increases to the most since the peak of the bubble. AsiaPac stocks are mixed with China flat and Japan higher after a mysterious bidder lifted NKY 200 points instantly at the open. China strengthened the Yuan fix after 5 days of weakness.

Offshore Yuan relative weakness suggest capital outflows are gaining pace once again...

as PBOC strengthened the Yuan fix for the first time in 6 days...

which may explain why Treasuries sold off so much today (on a relatively quiet equity day).

Chinese investors continue to pile into stocks in a leveraged way...

• *SHANGHAI MARGIN DEBT RISE HITS LONGEST STRETCH IN FOUR MONTHS

9th day in a row...

As Chinese stocks continue limp back towards pre-devaluation levels...

Japanese Stocks melted up to the 120 USDJPY tractor beam at the open...

And why would Japanese stocks melt-up? Why disastrous trade data of course!!!!

• Japan Sept. Exports Rise 0.6% Y/y; Est. +3.8%

Which can only mean one thing!! More Stimulus, More Devaluatiuon, and More Einsteinian Insanity until it's all over.

*  *  *

Oh and with regard China's bond bubble...

• *PBOC GETS >CNH30B ORDERS FOR CNH5B DIM SUM BOND

Nope, no bubble there.

Charts: Bloomberg

Comments

[kaboomnomic]

Dude, Onshore Yuan is LOWERED than OFFSHORE Yuan. That's for me only means 1 thing to me. PBOC is doing DEVALUING Yuan's once again. CB always try to prop UP their currency.

[Gambit]

Let 'em rip Willie

[scatha]

What China is re-balancing is not export of goods vs domestic consumption but export of goods with export of capital through multiple hubs selling Yuan denominated sovereign debt and London probably will be third world hub after HK and Singapore if UK won't screw up by involving themselves in the south china see american meddling in the region. We won't see Royal navy patrolling SCS or Australian navy. The wheel are turning accelerated by the west instigate collapse of global trade.

More of China can be found at:

https://contrarianopinion.wordpress.com/economy-update/