Highlights
China’s government and financial sectors returned to work yesterday after the Lunar New Year holiday. Equity and commodity trading was remarkably calm given all the tariff talk, but the yuan was weak. That most likely comes from the consensus that China’s economy is wounded by weak financial, perhaps an unstable political situation and cannot battle Trump nearly as strongly as it did during his first term.
All of Asia remains fixated on China and its next response to Trump's 10% tariffs on Chinese imports, after it formally launched a dispute last week at the World Trade Organization. There is some thinking that China has already decided to offer to return to the two-year trade deal it signed with Trump on 15 January 2020. However, reports from China indicate that it does not need the quantities of grain and beans it agreed to buy in 2020.
Conflicting reports yesterday if and when Trump and Chinese President Xi Jinping would talk. The U.S. Postal Service halted accepting postal packages from China, which blindsided e-commerce stocks yesterday.