Bloomberg on China: "Pessimism in the bond market is spilling over to the stocks"

Deleveraging risks the concern du jour (and for longer than one jour)

• calm persisted through the recent Communist Party Congress
• but now ... government bonds extend a monthly rout
• Concern the government will step up efforts to reduce leverage in the financial sector
• Shanghai Composite Index lower on Monday (down 0.73% as I post)
• Small-cap shares bore the brunt of the selling

Bloomberg cite Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong:

• "Pessimism in the bond market is spilling over to the stocks"
• "Surging yields of the government bonds are resulting in worsened sentiment and higher funding costs for companies, of which smaller ones will suffer most as they rely more heavily on the market rather than bank loans for financing."

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For more on China I posted today:

• there is more than 1 trillion yuan of maturing liquidity this week!
• Ahead of the PMIs, earliest gauges of China's economy for October are mixed indeed
• Plenty of data to come from China this week - heads up