Markets are bracing for a "catch-up" sell-off by Chinese traders as the world's second-largest economy resumes trading on Monday.

A week's break for Chinese Lunar New Year could have been a week of reprieve for financial markets, which have been speculating wildly on Chinese currency devaluation and demand.

Chinese traders return after a week of New Year celebrations. Credit:Michelle Smith

Instead, last week saw savage sell-offs in global banking stocks, and continued volatility.

Asian shares performed miserably and this risk-off sentiment is likely to channel through to Chinese markets, says research by Credit Suisse.