Some more detail on the recent repo crunch in China. The key here is that the month-end bottleneck was not huge relative to recent history. This means, as suspected, the real problem is in $ funding. China’s banks did not have the $ liquidity to cover the end of Jan as usual... 
Since PBOC has followed a policy of keeping official FX reserves flat in recent years, it appears that they are trying to solve the problem thru off-the-books $ swaps (thus the movement of collateral to Belgium to secure these swaps, as I have observed previously)...
The repo crunch, and recent slowing in Chinese purchases of $-denominated commodities (see copper below) gives some evidence that these sources of $ may be starting to dry up...
Finally, the way I see this being resolved is PBOC lowering the RMB reserve reqs for Chinese banks, which would allow them to supply needed liquidity in repo at the cost of likely hurting the x-rate. Just my 2 cents, but wanted to get it out there while all is calm for now... 💯
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