China Is Sending an Ominous Message to Junk Bond Buyers
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China just darkened the future for riskier corporate credit around the world.
The world’s second-biggest economy shocked markets this week by depreciating its currency by the most in two decades, with the goal of aligning the yuan more closely to the market rate. In response, the average price of dollar-denominated junk bonds plunged to its lowest level since 2011.