In less than an hour on Thursday, Chinese markets managed to turn what was a mundane session in Asia into a heaving sea of risk aversion.
Another weaker yuan fix from the PBOC, again significantly weaker than where the USD/CNY closed on Wednesday, along with a 7% plunge in China’s stock market in less than 14 minutes of trade, rattled markets across the region, and sent investors scurrying to traditional safe havens such as gold.
Many have dubbed the next 100 years the “Asian century”, a phrase coined on the belief that Asia – led by China – will become the dominant economic superpower in the decades ahead.
Given the price action witnessed in Chinese markets today, that dominance has already arrived, and all for the wrong reasons.
Here’s just a selection of charts that demonstrate just how influential Chinese markets were today, starting with US S&P 500 futures.
They’re currently down over 1%, having been higher in early Asian trade.
Crude futures, after being hammered overnight, fell to yet another fresh multi-year low.
The Australian dollar, deemed a China proxy given the close economic ties between the two nations, was hammered, falling to a fresh two-month low.
With risk assets under the pump, gold found favour, hitting the highest level seen in seven weeks.
If there was any doubt about the growing economic influence of China on the the global economy and markets, it surely disappeared in less than 60 short minutes today.