Uncertainty of Chinese Tightening Continues to Weigh on Asian Markets

According to China’s 21st Century Business Herald, Chinese banks made $212 billion in loans during the first 19 days of January. This large jump could help catalyze further tightening by Chinese officials. According to Credit Suisse Chinese Banks have suspended new lending since the 19th, which could have a ‘meaningful’ impact on manufacturing during the month–I personally was not able to confirm this. Additionally, Goldman Sachs downgraded Chinese Banks yesterday stating that, “potential collateral damage due to policy tightening or GDP slowdown is perhaps the hardest to assess, capping valuations until these overhangs are resolved.” The bottom line here is the road for Chinese equities will remain bumpy. Commodity prices are also struggling in London trading on heightened concerns.