Household deposit growth has slowed visibly this year ... which is strange, because consumer spending has stalled and there's been no turnaround in new property sales, i.e., the underlying household "savings glut" should be larger than ever.

But this trend is misleading. The reality is that household savings are still flooding into the banking system, but now indirectly. Among other things, the explosion in equity issuance over the past few quarters has transferred funds into the hands of firms and brokerages, and their deposits are rising sharply.

I.e., China is still very much in a "savings glut" world, with falling rates, falling spreads and rapidly disappearing volatility.