Fed Fallout Escalates: China Bond Market Crashes Most On Record, Yuan Plunges

After a bubblicious surge higher over the last few months (as China's hot money swishes from one trending-higher market to another), China's bond market is collapsing. As Chinese money-markets tighten into new year, yuan weakens, and capital outflows accelerate, so it appears the final bastion of safety has cracked. Chinese bond futures crashed overnight by the most on record, erasing in a week the gains of the last 18 months.

The rally began in 2014, buoyed by slowing economic growth and a monetary-easing cycle that kicked off in November that year. Now that is over…

 

As Chinese liquidity pressures ripple up from the short-term repo markets…

 

Offshore Yuan has tumbled 5 handles since The Fed raised rates…

 

And Japanese stocks cannot hold a bid despite the weaker yen.

It appears Janet's message about Trump's fiscal plan is starting to sink in.

US dollar surges to 14-year high as Fed hints at three rate hikes in 2017

Currencies felt the pain around Asia as investors reacted to unexpectedly bullish comments by Fed chair Janet Yellen

The prospect of three more hikes in US interest rates next year has sent the dollar to a 14-year high and caused a selloff on most Asian markets.

The US Federal Reserve increased rates as expected on Wednesday by a quarter of a point, only the second time it has done so since 2008.

Related: This is a true age of uncertainty for the world economy | Barry Eichengreen

Dollar Index jumps to 14y high, 10mth peak vs the Yen. https://t.co/qIdAXNEwpC pic.twitter.com/bZWg5XjNB6

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