Chinese interest rates keep ripping higher

The short end of the Chinese bond curve is the latest to break higher:

The 5/10 year curve remains inverted as well. All rates are now approaching highs associated with economic tops. Needless to say, this time is no different:


Via, Bloomberg, China Corporate Bond Investors’ Luck May Be About to Run Out:

“It’s very likely we will see a significant increase in corporate yields in the coming year,” said David Qu, a market economist at Australia & New Zealand Banking Group Ltd. in Shanghai. “The trigger could be tougher regulations or a default. A majority of non-bank financial institutions’ debt holdings are corporate bonds, so their selloff can lead to severe consequences. Banks are underestimating authorities’ intentions to tighten regulations.”

Signs of a turnaround are already beginning to show, with the yield on three-year AAA notes — the most common grading for Chinese corporate debt — rising 8 basis points, the most since May, to 4.90 percent on Monday. That extends the cost’s increase this month to 29 basis points to the highest level in five months. The spread between those notes and government debt has climbed in October and was last at 117 basis points, though it’s still a long way from this year’s peak of 150 basis points in April.

There is no cash crunch or anything of that nature here. But the economy is going to keep slowing.

Finance is also tightening for the real estate sector, iFeng: 楼市资金面趋紧 全国房价涨幅或继续下行

“Real estate as a capital-intensive industry, with a strong dependence on capital, changes in the financial side will directly affect the real estate market.” Yesterday, Lai Yi Ju researcher Qin said in an interview with reporters this year , with the deepening of the pace of adjustment of the property market, the property market funds face is clearly showing a tight situation.

From the point of view of buyers lever residents, according to 2017 third quarter financial institutions to invest in the central bank recently released statistics report shows that, as of the end of September, individual housing loans 21.1 trillion yuan, an increase of 26.2%, respectively, from the previous quarter and the same period last year down 4.6 and 7.20 percentage points. In fact, since this year, year on year growth rate of individual housing loans have been introduced to the downstream channel.

More, iFeng: 调控之下楼市降温明显 房子1.8万跌到1.2万无人买

Under the regulation, the most severe real estate Central Beijing property market has finally dropped! Institute research found that the chain of home in Central Beijing area: Compared with the March 2017 high of September Yanjiao chain of second-hand housing turnover fell 90%, the average price fell 26.9%. Homelink has revealed the above information, the display area Central Beijing property market slump.

Yanjiao down a little deal, Xianghe from the end of May to the chain of home on a deal now 5 sets, there is no market price! A netizen said that there is room in Central Beijing, before a lot of friends in Central Beijing basically a suite, house prices rose last year results were in a turmoil, plus a variety of levers, all kinds of various loans to buy! In April this year after the results, all the quilt, Xianghe has dropped to 12,000 from 18,000, not sell!

Here are the charts, for broad credit:

And mortgages:

It’s unequivocal. China to keep slowing.

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