The volatility in the Chinese currency has gone from the sublime to the ridiculous. After exploding twenty-one handles stronger in the biggest PBOC-engineered short-squeeze in history - erasing the entire post-election sell-off - offshore Yuan is now collapsing once again, down 350 pips tonight (and over 10 big figures from Thursday's highs). While interbank rates have calmed down, the rush to exit the currency has not...

The last two days are the biggest drop in offshore Yuan since Aug 2015's devaluation... as PBOC weakens its fix by the most sine June 2016.

Pushing historical volatility to its highest since the Aug 2015 devaluation...

For some context, this level of volatility is over 10 standard deviations away from the pre-Aug 2015 norms.

Notably the moves accelerate after PBOC Advisor Fan Gang told Bloomberg TV...

• *PBOC WANTS TO SEE FX RESERVES REDUCE SMOOTHLY, GRADUALLY: FAN
• *CHINA POLICY MAKERS NOT LIKELY GO FURTHER ON OUTFLOW CURBS: FAN
• *YUAN OVERVALUED IN PAST 3-4 YEARS AGAINST DOLLAR: FAN
• *CHINA POLICY MAKERS NOT LIKELY TO DROP INTERVENTION: FAN
• *USE OF YUAN HAS INCREASED DESPITE RECENT DEPRECIATION: FAN
• *CHINA NEEDS LESS FX RESERVE AFTER YUAN'S INCLUSION IN SDR: FAN

Which was followed by the state-run Global Times newspaper says in an English-language editorial, saying that the Chinese people will demand its government to “take revenge” if Donald Trump reneges on the one-China policy after becoming U.S. President.