China scaled back US Treasuries holdings

China reduced its holdings of US Treasuries by USD12.5bn from August to a seven month low of trn. This is related to China's effort to stabilize the CNY by currency devaluation in in August. Moreover, China's FX reserve also dropped by USD43.3bn in September. Likewise, Japan reduced its holdings from USD19.9bn to trn, which is the lowest level since October 2013. 

China's trust assets are reduced by 1.6% q/q and stand at CNY15.6trn in Q3 2015 against +10.1% in Q2. The drop will cause slower growth rate in the economy, increase volatility in the stock market, and reduce credit demand, says Commersbank.