China's liquidity crunch feared to finally take its 'small toll'

Hang Seng Index fell 7%.

According to BofAML, the eventful June finally came to an end, leaving behind a broad selloff in EM and a self-inflicted interbank liquidity squeeze in China.

In a single month Hang Seng Index and Shanghai Composite fell 7% and 14% respectively.

Here's more from BofAML:

On the data front, we see it is not as bleak as the stock markets would suggest, but major macro data could come in weaker than May on sluggish external demand, a halt of inventory buildup and the interbank liquidity squeeze.

Growth of IP and FAI could continue to trend down, while growth of trade and retails sales could largely stay flat. New loans could rebound in June but TSF could remain roughly unchanged from RMB1.19tn in May.