China

The US Navy has deployed an aircraft carrier strike group to the South China Sea waters, ignoring warnings from Beijing to cease provocations with China.  According to the US Navy, the deployment of USS Carl Vinson, together with aircraft from the Carrier Air Wing 2, and the guided-missile destroyer USS Wayne E.Meyer are part of “routine operations” in the disputed region. Rt.com reports: The deployment of the Carrier Strike Group (CSG) 1 began Saturday, just days after China issued a stern warning to stay away from the area.

North Korea just lost a very big ally.

After a week of jawboning markets into believing that the March FOMC meeting is now "live", it appears China has decided to send a little message.

After weakening the fix by the most since Jan 9th, Chinese money market rates are soaring (1 week CNH HIBOR up 303bps) despite notable liquidity injections...

Of course an unexpected rate hike in March is an implicit tightening of the world's financial conditions and thus liquidity withdrawal... reversing recent improvements in global dollar liquidity.

Threatening to destabilize the tentative improvement in Sino-US relations achieved in recent days following Trump's recent concession over the "One China" policy, was the US deployment of the aircraft carrier USS Carl Vinson (CVN-70) to the disputed waters of the South China Sea on Saturday as part of maritime "routine operations", according to an announcement posted on the Vinson's Facebook page.

In a preemptive move to limit foreign naval presence in proximity to China and especially the disputed South and East China Sea islands, China's People's Daily reports the Beijing is set to revise its 1984 Maritime Traffic Safety Law, which would allow the relevant authorities to "bar some foreign" (read U.S.) ships from passing through Chinese territorial waters. The Legislative Affairs Office of the State Council announced Tuesday it is soliciting public opinions on the revisions. Think of it as an Air Defense Identification Zone, only in the water.