Chinese authorities losing grip – Rabobank

By FXStreet FXStreet (Guatemala) – Analysts at Rabobank explained that Chinese equity prices slumped more than 7% in the first 30 minutes of trading, hitting circuit breakers, after which the market was closed for the day.

Key Quotes:

“Concerns have mounted that the Chinese authorities are losing their grip on markets and on confidence at large. Bloomberg reports that the China Securities Regulatory Commission was holding an internal meeting to “discuss market conditions and the circuit breakers.”

The scenario of a significant depreciation of the yuan – as predicted by our intrepid China watcher Mike Every – continues to unfold. And rapidly so. USD/CNY is trading at 6.59 this morning, from yesterday’s close of 6.55. The drop in the CNY since end-2015 is still about half of what we saw in early August 2015 (which ultimately led to 24th August’s ‘Black Monday’), but the dynamics are worrisome.

Meanwhile, there were clear signs that the authorities intervened in offshore markets, as the offshore yuan actually strengthened. Although there was no official communication by the PBOC, people familiar with the matter were quoted as saying that the central bank is considering further restrictions on CNY-CNH gap arbitrage.”
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Source:: FX Street