Another sign of Chinese citizens feeling the pinch has been recent reports suggesting that buyers in over 100 projects spread out across 50 cities in China have halted payments. Altogether, the property sector accounts for 25% of China’s GDP, with at least 4.5% of all outstanding mortgages in China expected to be affected.

Unsurprisingly, the median forecast for China’s growth for the year has been lowered by investment banks to a median of 3.4% – with Goldman Sachs holding the higher end of the estimate at 4%. The Chinese government had announced a growth of “around 5.5%” in the BRICS Summit in June.

Also unsurprisingly, China’s Ministry of Finance is considering allowing local governments to sell $220 billion worth of “special” local bonds in this year’s second half. The bond sales are reportedly being brought forward from next year’s quota since local governments typically don’t sell debt until January 1. Given the centrality of infrastructure spending to Chinese economic growth, local governments are being asked to propose and start new projects as soon as possible.

Meanwhile, the US dollar is gaining strength, which is another sign of an expectation of US recession. Despite declines in U.S. dollar purchasing power (as indicated by high inflation), many traders and strategists are expecting the Euro to break past the psychological barrier of $1.00 and go down to $0.9850 on a short-term basis as more investors seek refuge in the US dollar rather than be invested in the market. In expectation of the Euro breaching the $1 barrier, shorts in Euro positions have substantially increased last week.