Evergrande Update 4: On The Cusp Of A Banking Crisis
The Evergrande contagion has begun to affect China’s largest developer. This could mark the point at which the contagion embarks on its next phase.
A New Perspective On China’s FX RRR Hike 2
USD illiquidity is the real threat to the Chinese (and global) economy, which makes it prudent to think of China hiking its FX RRR from this perspective.
A New Perspective On China’s FX RRR Hike 1
Last week’s plunge in USDCNY was ostensibly due to a hike in the RRR for domestic banks’ FX deposits; done to halt CNY’s strength. Is this too simplistic?
Evergrande Update 3: Default Is Here, Focus Turns To CNY
Evergrande has finally formally defaulted. While not a surprise to markets, it did cause a plunge in the CNY; which isn’t a good sign for the rest of the world.
Evergrande Update 2: Is The Contagion Spreading?
Evergrande is back in the headlines again, having reported to be close to a formal default. How are markets currently pricing in the potential for contagion?
Evergrande Update 1: Is The Contagion Spreading?
As recent headlines attest, the Evergrande contagion, initially contained to the real estate sector, has begun to spread to other parts of the Chinese markets.
How Can Evergrande’s Contagion Occur? 4
Chinese authorities can intervene at any point in the Evergrande contagion. Timing is crucial – too late and fear will spread the contagion too far to control.
How Can Evergrande’s Contagion Occur? 3
As the Evergrande contagion spreads via the Chinese banking system, uncertainty could squeeze USD funding; from which it can spread to the rest of the world.
How Can Evergrande’s Contagion Occur? 2
As the Evergrande contagion spreads, financial institutions will have to write down their investments in real estate; such as loans, bonds, exotics and equity.
How Can Evergrande’s Contagion Occur? 1
The impending default of China’s largest real estate developer, Evergrande, saw global markets awash in a sea of red on Monday. What are the implications?
