CHART OF THE DAY: The Datapoint To Watch For China's War On Inflation

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China’s surprise Christmas weekend increase in interest rates took down markets in Asia and Europe today, but the real impact may be with SHIBOR.

The Shanghai lending rate between banks surged in advance and since the rate hike. But what’s the impact of the SHIBOR spike?

From Waverly Advisors:

In the very near term this squeeze on “hot money” puts pressure on equities trading on the domestic exchanges, making short-term volatility more likely.

If you’ve been following this chart, Saturday’s move may not have come as a surprise.

From Waverly Advisors:

chart of the day, shibor, dec 2010

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