It would appear the Chinese central bank currency squeeze is back as money-market rates are exploding higher once again. With the outpuring of liquidity heading into the new-year holiday, the post-celebration hangover was always likely unless PBOC just kept pumping but judging by the 500bps spike in overnight Yuan interbank rates to 9.3%, more than a few banks are desperate for some liquidity. We note that the last six times that Chinese banks have suffered liquidity constraints, US equities have tumbled…

While not at the extremes of mid December or mid-January’s catastrophes, O/N Yuan depo rates are soaring…

As it seems PBOC is not quite as liberal with its liquidty post-new-year…

and that bodes ill for US equities as the global liquidity problems this signals send ripples through every conduit (and their corresponding risk asset)…

Still 9.3% overnight deposit rates are probably nothing, right?