Worries over Evergrande exert pressure on offshore Yuan and weigh on stocks across the globe

Offshore Chinese Yuan (CNH) weakened by -0.17% against USD, dropping to its lowest level in a month. Investors are worried about the real estate developer Evergrande’s solvency issues. For investors on Wall Street, Evergrande feels like China’s Lehman moment. As a result, series of sell-offs in Chinese shares occurred overnight. The S&P 500 fell 1.7%, marking its worst day of trading since May. Recently, Evergrande, one of the biggest real estate developers in China, has been reported to have a serious liquidity crisis. In a stock filing this month, Evergrande said flat-out that “there is no guarantee that the Group will be able to meet its financial obligations.” Chinese regulators also warned on Monday that, the company’s insolvency might trigger broader financial system risks if not properly stabilized.

In the West, the Fed will hold its meeting this week. Central banks in Sweden, England, and Norway will also have their policy meetings this week.