Despite another liquidity injection and the rest of the world in 'euphoric risk-on' mode over the French election results, Chinese stock, bond, and commodity markets tumbled overnight...
On Friday, we asked "Is China Trying To (Slowly) Burst Another Stock Market Bubble?" as Chinese monetary conditions were tightening dramatically...
And, as Bloomberg reports, it seems the catalyst is further crackdowns on shadow-banking.
China’s banking regulator, which said late Friday it will focus on guarding against financial risks, has ordered local units to assess cross-guaranteed loans, according to a Caixin report.
Having gone 86 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992... Breaking below its 200-day moving-average.
CHINEXT (China's Nasdaq) is also getting hammered - testing its lowest levels since February 2015....
And Bonds were hammered too - with China bond futures price at the lowest since The Fed hiked rates in March...