Looks like that Chinese miracle may in fact be a mirage. Chinese state owned enterprises may terminate commodities contracts because of massive losses in financial derivatives, Caijing reports.
This raises a number of issues. First, the news will continue to pressure commodity and commodity currencies like AUD and CAD. It will also pressure investment banks that have Chinese counterparts. It may explain why some firms are so bullish on China, trying to prop up the economy with hot air so they can get the heck out. Sound familiar?
Looks like a risk-off day as the S&P loses 0.75% in futures trade.