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Chinese Stocks Extend Losses As PBOC Weakens Yuan First Time A Week

Following Monday's roller coaster of manipulated market machinations, perhaps China's leadership will keep its mouth shut tonight and just "monitor" the situation. Japan's opening 300-point flash-smash has now been eviscerated back to unchanged, Chinese stocks look set to open lower as Margin debt rose for the first time in 13 days (likely thanks to CSRC telling retail investors to "come back in, the water's fine.") As markets anxiously await China's trade data - which will either confirm the collapse or confirm the manipulation (given the utter devastation in Taiwan and South Korea trade data), the PBOC fixes Yuan weaker after 5 straight days of stronger fixes and injected another CNY150 billion in 7-day rev repo.

 

A reminder of yesterday's farce...

 

And as a reminder, it looks like tomorrow will be the day for Shanghai Composite to trigger its death cross, following CSI-300 signal yesterday.

And tonight is notholding up well...

  • *MSCI ASIA PACIFIC INDEX ERASES GAIN, IS LITTLE CHANGED
  • *CHINA CSI 300 STOCK-INDEX FUTURES EXTEND LOSSES, FALL 1%

 

Margin debt rose for the first time in 13 days - by the most in a month...

 

After 5 straight days of stronger fixes - the biggest 5-day jump in Yuan since Sept 2010:

  • *CHINA SETS YUAN REFERENCE RATE AT 6.3639 AGAINST U.S. DOLLAR
  • *PBOC WEAKENS YUAN REFERENCE RATE FOR FIRST TIME IN SIX DAYS

Just for context, this leaves Yuan a mere 4% weaker than pre-Devaluation - not exactly "war"

And time for some more liquidity:

  • *PBOC TO INJECT 150B YUAN WITH 7-DAY REVERSE REPOS: TRADER

It appears that fiscal policy is warming up...

Xinhua reports that National Development and Reform Commission (NDRC) has approved six highway and bridge projects worth a total investment of CNY77.47 billion

 

Says Beijing is speeding up the approval of infrastructure investment projects to stem the slowdown in economic growth.

 

And with South Korea's monetary policy decision looming, this will not help the race to the bottom...

  • *S. KOREA ECONOMY FACES UNCERTAINTIES FROM CHINA, FED

 

Charts: Bloomberg