FXStreet (Delhi) – Research Team at Westpac, notes that the global stock markets have had the worst start on record and the selling appears to be accelerating and China has clearly been a key driver of the weakness in global markets. Key Quotes “Seemingly random fixes, intervention in both on and offshore markets and clear evidence of capital flight from the region have again undermined confidence. China reserves data for December came in well below expectations last week, down US$108bn and over the last 12 months down US$513bn. The prospects of further weakness in January seem high. As the chart across suggests, acceleration in Asian CB intervention was a feature as 2015 came to a close. Its hard not to see more of the same in 2016. A messy China devaluation was always going to be a key risk to 2016, especially if it forced other central banks to engineer the same. The yuan has depreciated on both “the bilateral RMB-USD exchange rate and exchange rate based on a basket of currencies”. Since Dec 31, the yuan has depreciated by around 1.4% against the US dollar and 0.5% against the CFETS basket. Since August last year it is down 4.9% against the CFETS basket. In the short run, 6 fixes in a row in the 6.5615/45 region should be seen as a ‘stand down’ signal. The CNH intervention the same. But the suspicion remains that another wave of devaluation is around the corner. We await with interest responses from other central through January. ECB, BoJ and BoC next week followed by FOMC the week after of key interest.” For more information, read our latest forex news.