While FX volatility is turning down, perhaps the same thing is not in store for Chinese bond markets, with some concerns being raised
– Repurchase transactions allowing investors to use existing note holdings as collateral to borrow money for one day doubled in the past year to a record 2.1 trillion yuan ($330 billion) on Monday
"There are signs of an overheating market, and certainly the rally can’t last for long," said Wei Taiyuan, an investment manager at China Merchants Bank Co. in Shanghai. "Leverage in the bond market is much higher than at any time in history. If equities continue to perform well, or initial public offerings resume, the liquidity-fueled rally may come to an end."
Chinese bond market starting to show same signs that preceded the collapse in equities?
