Chinese property firms' bonds were hit with another wrecking ball this week as Evergrande missed its third round of bond payments in as many weeks.

The Evergrande contagion has continued to spread in markets and we are seeing risk-off on Tuesday in Asia following a negative close on Wall Street, likely owing to the Wall Street Journal that flagged the Central Commission for Discipline Inspection investigation into banks.

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High-yield Chinese bond markets have been in trouble again due to the fears about fast-spreading contagion in the $5 trillion sector, which drives a sizable chunk of the Chinese economy, continued to savage sentiment.

''If you cut off funding to a highly leveraged sector, and it sees sales collapse too, bad things tend to happen to liquidity,'' analysts at Rabobank said in a note today.

''The FTSE Chinese High-Yield index has now tumbled to 275.4, the lowest since late 2015, when back in May it was at 375.4, and looks like a falling knife. Chinese government bond yields didn’t benefit, rising slightly, and more so down the curve.''