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Explaining the August Stock Meltdown in China

10 September 2015

The below Maples Capital Fixed Income Commentary discusses the market's reaction to the August meltdown in Chinese equity markets.
 
The highlights of this report are the following:


  • The turmoil in global equity markets in August will most likely keep the fed on hold for September.

  • China has been slowing down in recent years, slowing from greater than 10% growth rate at the beginning of the decade to a current level of 6 to 7%.

  • This slowdown impacted the export markets in countries such as United States, Japan and South Korea.

  • Yields on the U.S. Treasury 10 year note fell 33 basis points as stock plummeted. This was driven by China selling U.S. Treasuries to raise dollars with which to buy Yuan and support their currency.

  • Most importantly, the world may not be able to rely on China to provide the lion's share of economic growth anymore.


Please click on the link below to read the full article.

Maple Capital Management August Market Movement Explanation