Margin debt on the Chinese stock market has reached $1.2 trillion. 'We suspect that it’s a matter of time before banks may have to face the music,' Bank of America says
For the rest of the world, it is a tense moment. China consumes 50pc of global coal, 43pc of industrial metals and 23pc of grains, according to World Bank data. Brazil, Russia, South Africa and a string of commodity states face a double-barrelled stress test. The Chinese are freezing imports just as the US Federal Reserve drains worldwide dollar liquidity and prepares to raise rates, calling time on emerging markets that have together borrowed $4.5 trillion in US currency.The Brazilian real fell to a 12-year low of 3.38 against the dollar on Monday. The South Africa rand hit a record low of 12.69. The Russian rouble flirted with the danger line of 60. It was the same story across much of the emerging market nexus. “One by one the dominoes are starting to fall,” said Societe Generale.