CHINA

China's up to something....

The People's Bank of China has allowed 1-year bill rates to rise for the first time in 20 weeks. They sold them at a yield of 1.84%, up 8 basis points. Last week, the PBOC made a similar move with 3-month bills and it drew a great deal of attention because it's a sign that the government might be moving to cool down the economy by increasing borrowing rates. The rise is really a drop in the bucked but it's the second drop in two weeks and it will likely be seen as a sign of more to come. If China continues to raise rates it will cool the domestic economy and that will spill over to the rest of the world.